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July 6, 2013

Health insurers fear young people will opt out

(Continued)

The penalty under the Massachusetts law, which served as the model for Obama’s overhaul, was $218 the first year in 2007. Gruber said that amount proved effective.

“People hate paying money and getting nothing for it,” he said.

Roughly 40,000 of about 6 million Massachusetts residents paid the penalty the first year, he said.

Many young adults have chosen relatively bare-bones health plans before the Affordable Care Act, but the new law requires all plans to offer a minimum set of benefits, thus raising the price for coverage.

The cost of health coverage is difficult to estimate because it includes so many factors, but a 27-year-old making $30,000 a year in 2014 will have a $3,400 premium and will be eligible for subsidies that cover about 26 percent of the bill. That person would end up paying $2,509, or about $209 a month. That does not include deductibles, co-pays and other variables which can vary widely.

The estimates come from the nonpartisan Kaiser Family Foundation’s online Health Reform Subsidy Calculator.

Francois Louis, a 20-year-old college student in South Florida who works part-time, can’t remember the last time he went to the doctor and gets by on over-the-counter medication whenever he’s sick. He’d love to get a check-up, but says it’s too expensive on his income of less than $15,000 a year.

“I probably would do the $100 fine because it’s just cheaper and you don’t have to worry about paying off monthly costs,” said Louis, a student at Broward Community College near Fort Lauderdale.

Louis would get a $2,718 tax credit and have to pay $300 toward his premium, according to the calculator.

Health advocates note that many people who have difficulty affording health insurance now will qualify for federal subsidies. The financial assistance will go to those making less than $48,000 a year who cannot get affordable coverage through their job.

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