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Obamacare Generation Gap: Why Young People Will Make or Break the Affordable Care Act

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The Patient Protection and Affordable Care Act, also known as Obamacare, has been controversial ever since it was enacted. But what's become increasingly clear to those on both sides of the debate is that the success of the program relies on having enough young people enroll for Obamacare. Yet many Americans don't really understand why having young people in Obamacare makes such a vital difference.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains why the economics of the health-insurance marketplaces rely so much on having a representative sample of the overall population. Health-insurance companies UnitedHealth Group (NYSE: UNH  ) , WellPoint (NYSE: WLP  ) , Cigna (NYSE: CI  ) , and Aetna (NYSE: AET  ) have all made projections about how many people will participate in setting rates, and if those assumptions prove incorrect, then insurers might have to raise rates dramatically in future years. Dan notes that given the risk-sharing attributes of insurance generally, having only higher-risk older participants would increase the overall costs of Obamacare dramatically, threatening its long-term financial viability. Dan concludes that the more young people participate in the plan -- even if they pay lower premiums -- the more effective Obamacare will be as a true insurance program rather than simply a cost-sharing redistributive measure.

Don't fall into the Obamacare generation gap
Understanding all the ins and outs of Obamacare might seem complicated, but it doesn't have to be. 
In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." But don't hesitate, because it's not often that we release a free guide containing this much information and money-making advice. Please click here to access your free copy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 30, 2013, at 11:27 AM, Gman wrote:

    As a general Democrats count on the young to accomplish every thing on their Liberal agenda. Young people who are fresh out of living at home tend to not have the life experience and tend to be bleeding hearts for any give to the under privileged project. It isn't until the late 20 that they realize they are carrying all this extra baggage that is preventing them from doing things they want, and the money they have spent was wasted and all the problems still exist.

  • Report this Comment On November 30, 2013, at 4:44 PM, johnestromjr wrote:

    Only at the point of a gun will they willingly buy ObamaCare. It's already a failure since way more than half of ALL Americans HATE ObamaCare that's being force upon us by Obama, Pelosi, Reid and turncoat Chief Justice John Roberts. ALL should be fired [or hanged] for their perfidy

  • Report this Comment On November 30, 2013, at 6:49 PM, okkate wrote:

    If anyone knows that websites crash all the times are the tech savvy millennials. They will absolutely and positively sign up! They are not stupid and not irresponsible. They know they are not invincible. They know they need medicine. They know the medical delivery system is the worst in the developed world and insurance is a scam, which needs to be controlled somehow.

    I wish the media would not put out so much of the anti ACA propaganda. It's not making you guys in media balanced or objective. It only makes media folks look ignorant.

    You may want to consider doing some investigative reporting.

    By the way, folks who dislike ACA are mostly people like me. I want Medicare for all. Had that ever been the case, the "socialist" in the White House would be having the highest favorability

    poll numbers of any President ever,

  • Report this Comment On December 01, 2013, at 1:06 AM, jesterisdead wrote:

    @ d'ohkkate

    Obamacare is simply insurance with added taxes. If insurance is a scam, why would young people sign up for it? Young people are smart enough to realize that someone else will pay for their major medical bills - they just have to go to the ER.

    Speaking of ignorance, do you even know what taxes have been added by Obamacare? Let me list a few of the major ones:

    -Sec.1404 - $4,100,000,000 annual taxes on drug manufacturers by 2018 and then $2,800,000,000 thereafter

    -Sec.1405 - 2.3% tax on medical device manufacturers

    -Sec.1406 - $14,300,000,000 annual taxes on health insurance providers by 2018.

    -Sec.1401 - 40% tax on health insurance plans that exceed $10,200 for individuals and $27,500 for families

    -Sec.1402 - 3.80% capital gains tax increase on those making over $200k or $250k on families

    -Sec.4375 of HR3590 - $2 tax on self-insured plans "just because"

    If you want free healthcare for all, feel free to donate money to your local organization to distribute to those people - leave me out of it. I am healthy and in my early 30s, but my insurance has gone up over 6.5x over the last 4 years, due to the gradual tax increases Obamacare has been adding.

  • Report this Comment On December 10, 2013, at 11:08 AM, TakingUpSpace wrote:

    Young men may opt out in huge number.

    Young, healthy men will see higher premium increases than their female counterparts. This is true despite these facts:

    Young men go to the doctor far less and cost their insurers far less than do young women, even factoring out women's reproductive-related visits.

    Young women will have more nonreproductive-related preventive services than young men. Check that out at https://www.healthcare.gov/what-are-my-preventive-care-benef... (I wonder how gay men will like that maternity coverage.)

    In short, men will get fewer benefits than women after being forced to pay a bigger premium increase. That's how Obama will uphold his promise to eliminate "premium discrimination against women."

    The crafters of Obamacare saw real discrimination against men as the safest way (because "men don't protest and they don't matter anyway") to pay for their healthcare program. See "Why so few men protest anti-male sexism (Or: Why men fear women)"

    http://malemattersusa.wordpress.com/2012/01/23/why-so-few-me...

    If a law required women to pay the same as men for auto insurance, the streets would be over-run with angry protesters of both sexes.

    Democrats always know which gender of the ox to gore.

    "Two takes on Obamacare’s discrimination against men"

    http://malemattersusa.wordpress.com/2012/03/18/does-obamacar...

    "Men Likely to Put Off the Doctor (Male Matters: Or: why men are charged less for health insurance)"

    http://malemattersusa.wordpress.com/2012/08/04/men-likely-to...

    "Who will pay more? Gender discrimination in health insurance costs"

    http://malemattersusa.wordpress.com/2012/06/19/a-brief-note-...

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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