One constant Obamacare gripe from Republicans is that the health care law mandates too big of a benefit package. This drives up premiums, they argue, and scares off some healthy and young enrollees who want to buy a skimpier plan.
There is some truth to this argument. Obamacare's marketplaces have struggled to attract young adults at the level the White House had initially hoped. (The Obama administration originally said it wanted one-third of the marketplace to be people between 18 and 34, but right now it's only about a quarter.)
Empowering Patients makes the individual market more advantageous for healthier people. It eliminates the essential health benefits package, which mandated that all insurers cover a set of 10 different types of care, including maternity services and pediatric care. Empowering Patients would allow insurers to cut whatever benefits they no longer want to cover — they could stop covering maternity benefits, for example, to make their plans less attractive to women who plan to become pregnant. This would likely benefit healthy people, who generally want less robust coverage at a cheaper price. But it'll send the cost of more comprehensive plans — the plans sicker people need — skyrocketing. And it could leave someone who wants, say, health insurance to cover her maternity costs completely out of luck.
There are other ways Empowering Patients makes insurance better for young people too: by letting insurance plans charge them lower rates.
It does this by allowing insurers to charge their oldest enrollees as much as they want. Right now, insurers can only charge the oldest enrollees three times as much as the youngest — that constrains prices for patients in their 50s and 60s.
Eliminating this regulation "increases the overall number of people with coverage, but older people end up falling out of the market as premiums rise," says Christine Eibner, an economist with RAND Corporation who has modeled similar changes to Obamacare's age-rating provisions.
And while young people might have cheaper premiums and an easier ability to enroll, older Americans could struggle to purchase coverage in this market, where their costs would rise. These are people who tend to have more urgent health care needs and could be in a worse position without health care than a young adult might be.
This worries some Obamacare supporters, who say the goal of insurance reform isn't just expanding coverage — it's expanding coverage for people who really need health care.
"If you replace a 60-year-old with a 20-year-old, that doesn't change the number of people covered, but it changes the value of the coverage and of the program," says Jonathan Gruber, the MIT economist who helped the White House model the economic effects of Obamacare.