Hope-less Change: Young Adults Will Be Dumped into Medicaid

by Nina Owcharenko

As the November election looms, President Obama has taken to the campaign trail once again to energize his base, this time targeting the youth vote, appearing on MTV and speaking to audiences in college towns like Madison, Wis., and Columbus, Ohio. But young adults may want to think twice before throwing their support behind the party responsible for the health-care overhaul. A new study by the Commonwealth Fund offers young Americans a glimpse at their health-care future as a result of the new law and shows that almost half of all uninsured young adults looking for health insurance under the new law will end up on Medicaid.

No Real Choices: The president and his supporters continue to stress that the Patient Protection and Affordable Care Act (PPACA) will give uninsured Americans more choices and options. For young adults, who make up the largest portion of the uninsured, this sounds great. It shouldn’t be a surprise that young adults find little value in purchasing coverage. Not only do they think they are invincible, but overly regulated state insurance markets and the lack of a fair tax treatment also discourage young adults from buying coverage.

But, what proponents gloss over when discussing these new options is that the new law does not give individuals the right to decide where they get their coverage. The government decides. Under the new law, to qualify for the health-care subsidies, an individual must first be checked to see if they qualify for Medicaid. If they qualify, they are ineligible for the subsidy and instead are to enroll in Medicaid. Because a large portion of uninsured young people are “low income” (the Commonwealth Study says about half — 49  percent, or 7.2 million), their “choice” is Medicaid. Some choice.

What Young Adults Should Know About Medicaid:

Fiscally Unstable. Medicaid spending has more than quadrupled in the last two decades. From 1990 to 2007, Medicaid spending increased from $69 billion to $316 billion. This trend is also pushing state budgets to the brink. Medicaid spending is second only to education spending at the state level and is pushing out other valuable states services. And this even before the massive expansion included in the new law.

Lack of Access. Since almost all states are required to balance their budgets, it is common for them to focus on cutting costs in their Medicaid programs. Typically, these cuts result in indirect cuts that on the surface appear to protect enrollees, but in reality create a program that promises more than it delivers. Studies show that Medicaid enrollees are more likely than even the uninsured to end up in the emergency room for basic care.

Poor Quality. The lack of access can also result in poorer quality of care. Restriction on pharmaceuticals, for example, could result in Medicaid beneficiaries getting less effective treatments. In addition, new studies are also coming out showing that Medicaid beneficiaries have lower quality of care. A recent study by the University of Virginia found that Medicaid enrollees had lower survival rates from major surgical operations than non-Medicaid enrollees, even after controlling for a plethora of demographic and risk factors.

So, this is what most uninsured young adults can expect. An overstretched, poorly performing government-run health-care program. Not exactly the change that they expected.

Nina Owcharenko is director of health-policy studies at the Heritage Foundation.

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