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How affordable is the Affordable Care Act, also known as Obamacare? One just needs to look at the state of Minnesota. The state’s health insurance marketplace illustrates some of the many pitfalls of the Affordable Care Act, which has been especially hard on millennials.
Under provisions contained in the act, nearly every American is required to have health care coverage. Minnesota established MNsure, the state’s health insurance marketplace; expanded Medicaid; and established the Medical Assistance program in an effort to ensure every Minnesotan has access to health care services under the federal law.
If the state of Minnesota’s goal was to improve health care, MNsure has been a disaster. But if the state’s mission was to get as many people as possible on the government rolls, its efforts have been a great success; 19 percent of all insured Minnesotans are receiving some form of government assistance, and enrollment in the Children’s Health Insurance Program increased by 20 percent in just one month, from November to December 2015.
In February, the marketplace released data showing the number of enrollees 55 and older increased by 7 percent compared to 2015. The data also revealed the number of younger enrollees has decreased.
The “affordable” part of the Affordable Care Act was based on the premise that younger, healthier enrollees would take on significantly more costs to offset expenses related to expanding the health insurance marketplace to better assist those with pre-existing conditions and those without the resources needed to pay for health insurance under a traditional market-based model. But younger people are not signing up at the rates many Obamacare supporters thought they would; and without significant growth in the number of younger, healthier enrollees, insurance premiums have risen at historic rates.
Blue Cross and Blue Shield of Minnesota increased its individual health insurance premiums by an average of 49 percent in 2016. Even with that increase, the health insurer is expected to endure significant financial losses through 2016. Blue Plus, another Minnesota health insurance company, increased its rates by 45 percent; and Group Health Inc. and HealthPartners Insurance Co. increased their rates by over 30 percent.
The millennial generation, composed of those Americans born between 1980 and 2000, is the first in the history of the United States to face the burden of compulsory health care insurance, and it is arguably the population that has been harmed most by the Affordable Care Act. For instance, one study found that, under the act, millennials pay greater out-of-pocket premiums than other demographics, despite having fewer health care expenditures.
Opting out of the state exchange is one way for millennials and others to avoid MNsure’s high costs, but doing so is not very affordable given the increases to Minnesota’s health insurance rates.
Making matters even worse for millennials in Minnesota, many younger people may now have to pay for a portion of the health care assistance a dead parent received in the past. When Minnesota agreed to expand its Medicaid program, required asset tests were eliminated. Prior to that change, assets such as real estate were accounted for when determining eligibility. Now assets are not used against the enrollee initially but can still be used to recover the costs the state incurs during the period of enrollment on Medical Assistance after a person dies. In February, the News Tribune reported that many Minnesotans are unaware that if they are 55 years old or older and are receiving Medical Assistance, the state has the power to place a claim on their estate to recover the costs of the Medical Assistance insurance after the enrollee and his or her spouse dies. While Minnesota lawmakers this session are considering measures to fix this, right now this means many children who inherit their parents’ assets will be saddled with health insurance bills belonging to their deceased parents.
Millennials already are facing stiff government fines and higher health insurance costs as a result of the Affordable Care Act. Now, thanks to Medicaid expansion, grieving young people in the state also may have to use their inheritance to cover additional health care costs under a provision very few people knew existed.
It’s becoming increasingly clear the Affordable Care Act is anything but affordable.