Rate Shock Myth Debunked

A recent blog post from Community Catalyst, focuses on dispelling the “RATE SHOCK” myth.  As the post says,

“Lately, many insurance industry-funded studies and the resulting news coverage of them have focused on the potential for “rate shock” for the young and healthy, fear mongering young adults and others into thinking their rates will skyrocket come 2014.”

Instead, the truth is far different from the claims of the rate shock scare tactics.  As another advocacy group, the Young Invincibles, points out:

“The reality is that most uninsured young adults will qualify for subsidies or Medicaid, making coverage better and more affordable – a fact that the ‘rate shock’ crowd ignores.”

So, contrary to the rate shock scare tactics, the Affordable Care Act (ACA) will not be frightening young adults away from health insurance.  In fact, the ACA is already responsible for improvements in the rates of coverage of young people, as reported in a study released by the Commonwealth Fund today.

What the study also shows, unfortunately, is that while there are fewer uninsured young adults, the overall numbers of uninsured and underinsured adults has continued to grow.  The Commonwealth Fund reports that forty six percent of adults aged 19-64, or 84 million people, had no insurance or inadequate protection from health care costs in 2012.  In 2003 that number was 61 million and in 2010 it was 81 million.

“Thirty percent, or 55 million people, were uninsured at the time of the survey or were insured but had spent some time uninsured in the past year. An additional 16 percent, or 30 million people, were insured but had such high out-of-pocket medical costs relative to their income that they could be considered underinsured.”

The study shows that it is lower income people that make up a disproportionate share of the uninsured and underinsured.  It also provides information to show the burden of medical debt and the high cost of medical care that is placed on many Americans.  Over 40 percent of adults surveyed avoided getting needed care due to cost concerns.  A similar number reported problems paying medical bills.

In Connecticut, the expansion of Medicaid and the implementation of the new insurance marketplace, Access Health CT, is due to occur in January, 2014, with enrollment beginning this October.  The large majority of the uninsured and underinsured in our state will be eligible either for Medicaid or subsidized coverage, thanks to the ACA.  And this will be coverage that is more comprehensive and has better out-of-pocket protections than is generally provided to individuals in the current insurance market.  This is welcome news, not scary news for Connecticut.

Jill Zorn is the Senior Program Officer for Universal Health Care Foundation of Connecticut.

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