A young adult generation with college debt, limited assets and an uncertain job market who rarely need to use the healthcare system should be prime customers for low-premium, high-deductible health plans. Not so, some data suggests.
A new survey from Bankrate has uncovered some slightly counterintuitive consumer preferences in the new health insurance market, though perhaps not so irrational in the context of today's economic times.
In a survey of 1,000 adults, more than 50 percent of those earning at least $50,000 said they would rather buy a health plan with a low premium and a high deductible -- something that less that 40 percent of those earning less than $50,000 would prefer.
Meanwhile, more Millennials, those ages 18 to 29, seem to prefer the Cadillac-esque plans that come with high premiums but low deductibles and rich benefits -- moreso than their parents' generation.
Forty-six percent of Millennials surveyed by Bankrate said they'd prefer to buy a coverage plan with high premiums and low deductibles, compared to only 33 percent of those 50 or older.
While they survey sample was small, the preferences seem to have played out in the Affordable Care Act's first open enrollment.
Of the 2.2 million adults ages 18 to 34 who bought a plan through the federal exchange last year, only five percent purchased catastrophic plans, the lowest-premium plans with $6,000 deductibles limited to individuals under age 30 and those who can't find coverage for less than 8 percent of their income. Only 17 percent of 18-34-year-olds purchased the bronze plans, the lowest premium plans available to everyone.
The rest of the young adult membership purchased more generous plans with higher premiums but lower deductibles and out-of-pocket caps -- 68 percent of them silver plans, 7 percent gold plans and 4 percent platinum plans.
That so many young people would purchase plans with higher premiums is counterintuitive if these are individuals who are unlikely to be frequent visitors to doctors or hospitals for anything beyond primary care.
It's possible that in some very large states with their own exchanges -- like California and New York -- more 18-34-year-olds have purchased lower-premium plans than in the states covered by the federal marketplace; national data isn't fully available.
But if a majority of young adults are embracing higher-premium, lower-deductible plans, it could be that those buying ACA plans actually want to use them and want to pay as little out-of-pocket as possible -- trading the predictable monthly costs of a higher premium for an assurance that a whole range of services are covered without a $5,000 bill. They demographic of "Young Invincibles" may not be as healthy and free of chronic conditions or disease risk as the name implies.
It also makes sense that some lower-income adults would buy lower-deductible plans while their peers earning upwards of $50,000 would buy HDHPs. The latter demographic might have $10,000 in savings that could be tapped in the event of a healthcare crisis, while many lower income Americans have only recently been able to afford any health insurance thanks to the federal subsidies.
(Photo via Flickr.)