When President Obama promised millennials that they could get health insurance for $100 a month or less, he wasn't thinking of Assante, a young New Yorker with two part-time jobs and a high cost of living.
Assante works two part-time jobs as a server and has lived in New York for about five years. One of his jobs offers health insurance – but only to full-timers. "But because I am part-time, I don't qualify for it anyway.”
He's decided, instead, to stay uninsured and pay whatever one-time penalty comes up.
And while the plan would probably only cost him a quarter of his monthly rent, there are other expenses that eat away at his income – there are his student debt, his monthly metro card, groceries and the money he sends home to Georgia from time to time.
The financial situation of these so-called "young invincibles" such as Assante doesn’t really allow for extravagant spending. Many of them are currently working poverty-wage jobs. Over 18% of college graduates are under-employed. Many work part-time jobs that do not come with health insurance.
For millennials living in expensive cities, Obamacare is no more affordable than the old ad-hoc system of healthcare, because it remains financially out of reach: their wallets are under siege from higher living costs. That makes Obamacare, which is often the most affordable option open to them, not affordable enough.
These young Americans between 18-34-years-old are, in the eyes of the White House, a crucial demographic needed in order for the Affordable Care Act to work. Yet for many of them, health insurance is one of the last things on their mind as they deal with high college debt, working part-time jobs and unsteady flow of income. Even without the additional cost of health insurance, many are already struggling to make ends meet and they can't imagine trying to pay for yet another monthly bill.
"I am not an Obamacare hater," says Irina Ivanova, 28, who chronicled her experience with trying to enrol in Obamacare for Crain's New York. "But you know what it is? It feels like extortion. You have to pay this much money, or otherwise you are a bad person and you get a fine and you won't be covered if something bad happens."
As with most bills, like those for cell phone or cable, young Americans have quickly learned that there is fine print for healthcare too. In the case of health insurance, the rarely mentioned costs are the deductibles that enrolees have to pay on top of their monthly payments before their coverage really kicks in. These deductibles are often thousands of dollars and as a result the health care bills rarely end up being as cheap as the cell phone bill cited by president Obama.
At the same time, wages for recent graduates have remained almost unchanged since the 1990s – averaging about $16.35 in 1989 and $16.60 in 2012 – and health insurance premiums have almost doubled. According to Kaiser Family Foundation report, health insurance premiums have risen by 196% since 1999. Similarly, worker contributions have grown by about 182% during that time.
In the end, it's not the monthly payments that are the most difficult for most young Americans to handle, but those high deductibles, says Jim Brown, national director of health services at The Actors Fund.
So far, Brown's office, which also runs the Artists Health Insurance Resource Center, has helped enrol about 320 New Yorkers, and is likely to enrol 40 more.
A good number of people who come to him for assistance make $29,000 or less. That's supposed to be the threshold when cost-saving reductions like tax credits and subsidies kick in. Brown says none of the people he's worked with have chosen to pass on getting insurance due to the costs or the high deductible.
"It's the law. It's a mandate," says Brown.
For some, healthcare means credit card debt
Not all millennials think of themselves as young invincibles. Clarissa Leon, a 28-year-old living in Queens, New York is one of them.
"I had this job that wasn't giving me any benefits and I was gung-ho about getting insurance. I really wanted it. I haven't been to a doctor in five years. I haven't gotten to the dentist," says Leon, who works as a contractor at Food Network.
As a result, come December, Leon was one of the first in her circle of friends to sign up for health insurance through the New York exchange. Yet, her plan came with a financial surprise.
"I discovered, to my chagrin, that my deductible was $2,000. Which shouldn't have been a shock, because I was paying one of the lowest deductibles," says Leon, shaking her head.
What I had to learn the hard way, was ‘Oh, a deductible means I have to spend $2,000 for my insurance to actually start to kicking in and me not having to pay.’ That's ridiculous. I would be paying another $2,000 on top of $325 a month for me to go see a doctor. For me, financially speaking that's not going to work out."
As a result, Leon upgraded to a higher plan, with no deductible. The silver MetroPlus plan first chosen by Leon cost her $325 a month, which she says came out to be about 14% of her monthly budget. At $369, the new plan cost her $44 more a month.
“That’s huge, considering my rent is like 30% to 32% of my monthly costs,” she says. "This is not something that is affordable, per se. I can afford it, but after I account for all of my expenses, this is it. I can't do anything more." For Leon, who is still paying off college loans, that means no way to save.
She also has credit card debt. “Not a lot, but it’s there.” Thanks to having to keep up with health insurance, she may end up buying more things on credit.
“I noticed once I got [my bill] that you can pay for your insurance with your credit card. So I have been doing that. But paying it off is going slower. It's just a big chunk,” which makes it harder to budget, she says. “All of a sudden I have this $400 credit card bill every month.”
"It would have been cheaper to do a penalty, for sure," she allows. “But it's hard, you never know what happens. At the same time, I wanted insurance. I do want this and I do want to keep it, but ... the economies of keeping this particular plan just don't pan out."
Come next year, after all of her check-up and follow-up appointments are taken care of and her insurance plan is up for a renewal, Leon is considering going back to a plan with lower monthly payments and higher deductible.
Before that happens, she has yet another hurdle to overcome. Her current work contract expires in June and is not being renewed. Leon says that her being let go is “almost a better thing to happen, because my income goes down and I will qualify for more [assistance]”.
As subsidies are based on one’s income, lower pay could mean higher subsidy and lower health insurance bill. When looking for a new job, Leon will be faced with making a decision between higher pay and more expensive insurance or lower pay and more affordable health insurance. Currently, her monthly subsidy is $56.
"Which do you choose? Well, I would rather have more affordable insurance, because you never know what will happen," she says.
Mo' money, mo' problems
I had never expected that Obamacare would affect me at all. While I was in school I was on Medicaid, because I made no money. I never went to the doctor, because I never needed to. And when I applied to Medicaid it was super easy. It was all of half an hour. I felt super secure and not worried.”
The turning point for Irina Ivanova was when she found a part-time job. While still attending graduate school, Ivanova was now also working three days a week, 20-24 hours, at $20 an hour. "I wasn't making a whole ton of money, but suddenly I was making way too much for Medicaid,” she says.
As a result, she decided to consider her options. Starting what she describes as "incredibly confusing process" she logged onto the New York marketplace and hoped to find a plan that cost about $200 a month or less.
"The way I calculated that was – basically after I paid rent, utilities, transportation, food, that was most of my disposable income," she explains, adding that $200 felt "fair and reasonable" considering she only planned to get a check up and maybe would need few other minor things over the year.
The cheapest plan available to her? “It was $290, with a $6,350 deductible, which is a lot,” she says. "I added up everything that I would be paying, assuming that I would hit the deductible, and it was basically as much as my rent for the entire year. It just made no sense." In the end, Ivanova ended up going without insurance.
I got cold feet. I don't know why I would sign up for this. I told myself I would think about it, but really I just couldn't justify paying that much money."
At $290, the premium was almost half of Ivanova’s rent. "It's more than I pay for my groceries. It's more than I spend on my utilities bills by far. I don't have single monthly expense that high, except for my rent.” she says. Ivanova, who has recently been promoted to full time, says that her penalty is likely to be somewhere between $200 to $300 -- same as one month’s premium payment.
The entire experience of looking for insurance has cast a shadow on her personal successes.
"I was really psyched to have this part-time job that was hourly, well paid. It just seems so unfair that I would have to spend a whole bunch of that money on a product that is not that good," she says. "You can get a crappy plan with a high deductible, except in New York that apparently costs $300."
Affordable plan that was of no use
High deductibles aren’t a problem for everyone. Sometimes the available plans don't cover the kind of healthcare that millennials need.
“We are a generally healthy family. My husband has been insured for years, but only went to the doctor once. With that in mind, we’d rather have a higher deductible, just so we pay less a month,” says Liz Hadaway, 28, who attempted to sign up for insurance in Nashville, Tennessee.
"I worked full time and was insured before I had my son. And then when I had my son, I took a part-time job at a non-profit and lost my health insurance. I haven't been insured in over two years," she says. Her current job allows her to work from home so she can take her of her son.
When the marketplace came out, Hadaway signed up and selected a Blue Cross Blue Shield policy for herself and her husband. In the process of signing up, she found out that her son qualified for state insurance and they wouldn't have to pay to cover his policy. It all seemed to work out, until they got their bill.
A couple of days later, we got a bill for [our plan] and found that not a single doctor in the county that we live in accepted that particular plan."
The $140 a month plan – after a subsidy, which covered about half of it – for Hadaway and her husband, 30, was cheaper than the $160 a month plan that they currently had to cover her husband and son. Yet with no local doctors taking the new policy, the Hadaways decided not to pay the first month’s premium required for the plan to go into effect.
As the deadline got closer, Hadaway says she tried finding another plan through Blue Cross Blue Shield. She was told that her account was suspended due to the unpaid premium and that she should go back to the marketplace. And so they did. Her husband got on the phone with the exchange's help line and waited … and waited.
“[My husband] was on an hold for an hour and a half on Monday, the day of the deadline, and finally got someone to answer, and then the call was dropped,” says Hadaway. “We decided that it's not worth it. If we only need to pay $95 or whatever of the penalty for not having to sit through that again, then that's totally fine.”
As Hadaway's husband's previous health insurance doesn't expire until the end of 2014, she is the only one who will have to pay the penalty for being uninsured.
For Hadaways, who made combined about $46,000 last year and are paying off one college loan, the frustration is not with the cost but with the complicated process and the plan that ended up being more trouble than it was worth.
“We could've afforded it, if someone in the area had taken it," she says regretfully.
