Open Enrollment right around the corner, uninsured millennials are faced with a decision – sign up for Obamacare in order to be covered or opt out and risk paying the associated fines.
The decision, and impact, is not to be taken lightly.

According to a recent Harris Poll, one in five millennials reports they cannot afford routine health-care expenses. Many of these young adults, ages 18-36, remain uninsured due to the high cost of healthcare. Another 26 percent said they can afford routine health-care costs, but with difficulty.

As a result, many millennials continue to opt out of Obamacare.

However, this has caused several large insurance companies, most recently, Aetna, to suffer heavy losses and ultimately abandon the public insurance exchanges. These insurance companies are being forced to pay more than they expected in large part because not enough young, healthy people are signing up. In the most basic sense, millennials pay into the system more than they take from it in use of services, since they tend to be healthier and use less care - balancing out the older, sicker customers in insurance pools.


There are two main, but not always distinct, reasons that have been identified:

  • Many millennials feels that healthcare available through the marketplace is unaffordable. The penalty for not carrying insurance has jumped from $325 to $695 per person.  However, some young people say that, even after paying the penalty, they would still come out financially ahead if they opted not to buy into Obamacare.
  • According to a recent survey commissioned by the national non-profit Transamerica Center for Health Studies (TCHS), cost is a very important factor when seeking healthcare. More than half of millennials (66%) feel that a premium at or above $200 per month is unaffordable. Interestingly, cost is also a barrier to actual care: One in five millennials reports being unable to afford routine healthcare expenses, while an additional 26 percent say they can afford it, but with difficulty.
For some, the antipathy is frustration with the high out-of-pocket costs, for others its due to lack of awareness and for some it’s a combination of both. 

Several studies have shown that their lack of knowledge has led millennials to decline coverage altogether.

In general, millennials have poor health insurance literacy, with 48% incorrectly defining the term "deductible" and 78% incorrectly defining the term "coinsurance," according to a study called "Seeing Health Insurance and through the Eyes of Young Adults,” from the Journal of Adolescent Health (August 2015). The study, which observed young adults aged 19 to 30 in Philadelphia as they sought to gain insurance on, describes the dearth of information Millennials have surrounding health insurance and benefit and plan preferences.

Trending: The Millennial Generation: The Most Underinsured Generation Alive

millennials.question.obamacare.jpgWhat’s next for Millennials and Obamacare?

Faced with choosing between these penalties and a myriad of options many cannot decipher, many millennials end up opting out of Obamacare altogether. Insurance companies must do a better job of explaining complicated policies and terminology, or risk leaving America's workforce of the future unable to take care of itself. The key is providing options and information so that all consumers, including millennials are able to make educated choices that meet their needs. 

Open Enrollment begins November 1, 2016
and runs until January 31, 2017