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For Some, Health Insurance More Costly Than Uninsured Penalty

Young people with low incomes often pay as much as or more than older individuals for bronze plans

TUESDAY, Sept. 9, 2014 (HealthDay News) -- For some young people in the United States, the cost of paying a penalty for not buying health insurance will be lower than the lowest-cost insurance, according to a study published online Sept. 9 in the Annals of Internal Medicine.

Ilana Graetz, Ph.D., from the University of Tennessee Health Science Center in Memphis, and colleagues examined the cost of purchasing the lowest-cost health insurance plan (bronze plan) in every U.S. county after accounting for income-based subsidies. Premium data for all health plans offered in the state and federal health insurance marketplaces were obtained.

Although marketplace subsidies ensure affordable health insurance for most U.S. individuals, the researchers note that many with incomes above the subsidy threshold will not be able to find affordable coverage and will be exempt from the mandate. Compared with older individuals, young individuals with low incomes often pay as much or more for bronze plans. Health insurance premiums across all ages may increase over time if substantial numbers of younger, healthier adults remain uninsured because of cost, the researchers write.

"When penalties increase in future years, more individuals of all ages will be compelled to buy insurance," the authors write. "However, enrollment of healthier, younger adults in the first year of the exchange may be critical to curb future premium inflation."

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