Mandate Must Convince Young Americans to Buy Health Insurance Plan

Behavioral psychology could be used to encourage young individuals to sign up for the health insurance plan of their choice. An article in the Washington Post describes the challenges of mandating people to buy health insurance. In order for healthcare reform to succeed, those Americans who can afford it must buy insurance. This is especially true of the younger demographic, since young adults are generally more healthy as a group. Including them in a larger pool of health insurance buyers should lead to lower costs per person. However, it is very hard to get a notoriously present-focused group to think about the future–and the possibility that they might need to use health insurance sooner than they expected. Health insurance for students is available, but many don’t take advantage of it; and what about those who aren’t attending college?

In the long run, paying insurance premiums for years when you’re well will probably end up being worth it when you get sick. But rational economic self-interest tends to take a backseat to social norms and the amount of effort required to do something. Experts speculate that minor inconveniences prevent people from taking part in government programs. By streamlining the application and insurance process through default enrollment programs that use a person’s tax payments to automatically pay for premiums (similar to corporate 401(k) plans that make you opt out as opposed to opting in), as well as a heavy publicity effort and community support, the federal government can make sure that more young adults buy health insurance. Studies have shown that if you want to encourage people to take a particular action, you need to make it as simple and effortless as possible.

Penalties for not buying insurance are imperative. They make the mandate more effective, while attempting to ensure that the federal government isn’t stuck covering subsidies for only the oldest, unhealthiest individuals. Unfortunately, the penalties in the most recent Senate proposal; max out at a $750 fine, and wouldn’t reach even that level until 2017. Some people may decide to pay the fines instead of paying for individual health insurance, since a fee that small isn’t discouraging enough. Getting young adults to buy a health insurance plan now is very important.