NCPA - National Center for Policy Analysis


November 11, 2009

Barack Obama won the presidency with 66 percent of the vote among adults ages 18 to 29 - a larger share than any presidential candidate in decades. So it's ironic that his health plan could impose its greatest hidden taxes on young adults, says Aaron Yelowitz, an associate professor of economics at the University of Kentucky and an adjunct scholar at the Cato Institute.


  • Young adults make up just 17 percent of the population but account for 31 percent of the uninsured.
  • The legislation before Congress would force young adults to purchase health insurance at prices far higher than the market would charge.
  • The legislation would use that hidden tax to reduce premiums for their parents, who typically have higher incomes.

We can see how the Democrats' legislation would work by comparing premiums in California and New York.  Like that legislation, New York requires insurers to charge young adults the same premiums as older adults.  California does not, says Yelowitz.

According to

  • The median premium for a 25-year-old in New York is around three times as expensive as in California ($410 versus $134 a month).
  • In addition, young adults living in California can choose from nearly 10 times as many health plans.

Since about one-third of young adults already reject health insurance at current prices, even more of them would avoid coverage if Congress drives those prices higher.  Congress anticipates that response.  Each bill includes an "individual mandate," which would force U.S. residents to purchase health insurance, whether they want it or not, on penalty of fines or imprisonment, says Yelowitz.

Source: Aaron Yelowitz, "Why would Congress compel young adults to buy health insurance they don't need?" New York Daily News, November 9, 2009.

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