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Will ‘smart’ shoppers bring down PPACA?

BenefitsPro reports:

“Even before benefits became my job, I knew they were a big deal. When my parents talked to me about job options as I dove into the workforce—and before that, too—much of the conversation revolved around the importance of benefits, notably health insurance.

No health insurance? Never an option. It didn’t matter how much it cost; I knew I had to have it.

My own health insurance plan after college became a badge of honor. I was supporting myself, no longer on my parents’ plan. For me it also felt like a personal — and social — responsibility.

I had insurance, and I used it. I never missed an annual checkup, I got the preventive services I needed; I got blood tests and cholesterol checks and the like. I had prescriptions filled. And I’ve certainly used the insurance when something big and unexpected cropped up. I couldn’t imagine not having it.

I found out rather quickly that a lot of others my age didn’t feel the same way. I was shocked by how many of my younger adult counterparts didn’t feel the need to get insurance. Some of the reasoning went like this: “I never get sick” and “Why spend the money on something I won’t use?”

This brings me to PPACA. The system will rely on young — and presumably healthier — consumers entering the market. Everyone needs to sign up for insurance or pay a fine beginning in 2014. That’s one of the big potential downfalls of the law: Younger Americans might not opt to sign up for insurance, and choose to pay the penalty instead.

The result? A disproportionate number of older and sicker people purchasing insurance, which will raise premiums while also discouraging even more from enrolling.

A new poll from the American Action Forum found that as premiums rise, younger Americans (those aged 18-40) will increasingly choose to pay the fine instead of buying insurance.

Nearly half said they wouldn’t buy health insurance if premiums increase 30 percent —which might be the magic number when it comes to premium hikes, if you believe some industry insiders.

When push comes to shove, younger Americans are price sensitive — and it’s no shock.

Why would they pay for something that’s so ridiculously expensive if they can opt out for a measly $95? Plus, if they really need coverage, they presumably can step in to buy a plan on the spot. In the most basic sense, they’re being smart shoppers — they won’t pay for what they don’t need.

So what’s the incentive to do so? For many it’s not fear of getting sick, as there’s too often a feeling of invincibility among the youth. It’s also not the responsibility of getting it for their family, as more and more younger Americans are putting off both marriage and kids.

I say smart shoppers in the most basic sense. Think Economics 101. $95 once a year, or $200 every month? Short-term, they don’t want to waste their money. But we all know that long-term, not having insurance is beyond a dumb idea.

In my mind, I keep going back to this responsibility thing. It’s the one idea that insurers and the administration are going to have to push among younger consumers if they want them to enroll in mass. They have to push the idea that buying health insurance is part of personal responsibility.

But I’m just not so sure it will be an easy sell.

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