Regardless of the constitutionality of the Affordable Care Act, it is a bad law with adverse effects on college students and recent graduates.
Nearly two weeks ago, the Patient Protection and Affordable Care Act was upheld as constitutional by the U.S. Supreme Court. The ruling cited the congressional taxing clause as rationale for upholding the law.
As if college tuition was not costly enough, the act inserts an additional expense for students through the individual mandate. The mandate requires that a student either purchase healthcare coverage or be monetarily penalized. The current annual price of coverage offered by Texas State is $1552, which is an expense not necessarily in reach for a lot of students.
The act has a much-celebrated feature that is considered to be a limited remedy for the individual mandate. This feature is the ability for adults to remain on the healthcare plans of their parents up until the age of 26. However, that ability is more problematic than helpful. Many employers will likely have to increase the premium on their healthcare plans because more people than what the plans can support will return to their parents’ coverage.
The “community rating” provision of the act should be cause for serious concern. A measure taking effect in 2014, the “community rating” will narrow down the difference of premium costs between age groups sharply. A presumably healthy person in their 20s will be forced to pay a higher amount on their premium to more closely approach what someone in their 60s is paying. This is analogous to someone with decades of driving experience paying unnecessarily higher insurance rates to help bridge an economic divide with a 17-year-old driver. Worst of all, the youngest, who are also typically the lowest income earners, will be the ones most adversely affected by the “community rating.”
Another part of the act is an explicit tax on tanning salons. Practically all of these tanning salons are small businesses not in need of more taxation. Tanning salons have clearly set up shop in San Marcos and neighboring areas to cater to some of the industry’s greatest consumers — college students. This taxation only stifles the productivity of these small businesses during already difficult economic times.
Other small businesses throughout San Marcos will also be hurt by provisions in the act. For several reasons, including the cost, many small business owners choose not to provide health insurance to their employees. To comply with the act, small businesses with at least 50 employees must offer health insurance coverage. The penalty for not complying with the law is $2,000 per employee. The small businesses of San Marcos employ many Bobcats. The businesses who cannot afford to offer health insurance coverage might cut staff as an alternative, and student employees will likely be the first to go.
By 2016, the penalty for not buying health insurance will stand at $695 a year. Jonathan Gruber, an MIT economist instrumental to the design of the act, is projecting an increase of 19 to 30 percent in premium costs for the individual market. Either way, the act will provide an undue burden for recent college graduates and people struggling to find and sustain employment.
According to Chief Justice John Roberts in his ruling for the act’s constitutionality, “It is not our job to protect the people from the consequences of their political choices.” Thusly, students at Texas State should take to the polls this November to vote for people who will work to repeal and replace the act.