Youth, Health Insurance, and Costs Versus Benefits

By Andy Oram, O’Reilly Media

The data crunching service BeyondCore, as reported by CEO Arijit Sengupta, has turned up intriguing data about the prevalence of illness among people age 18-35 and its implications for the costs of insuring these people. (Sengupta will speak at the upcoming Strata Rx conference on this topic).

Given the major place that the Affordable Care Act (ACA) places on getting young people onto insurance plans, BeyondCore’s research may force us to re-evaluate our assumptions about health insurance costs. I’ll return to the ACA later in this piece, but I want to talk about the human side of their findings first.

The relationships between age and illness discovered by BeyondCore are simple, although it took some sophisticated analysis to turn it up (read the article to learn about them). BeyondCore looked at a population of insured Americans age 18-35 and discovered that a large percentage are being treated for mental health problems. Some 18% have chronic mental health conditions that cost an average of $7,000 per year to treat.

Now contrast this with claims that the incidence of chronic illness is as low as 4% among the young. It is highly unlikely that the uninsured have less mental illness than the insured–they almost certainly have more, because a lot of mental illness makes it hard to hold a job, stay in school, or engage in other activities that bring a person into the insured pool. Most likely, the low estimate for chronic illness was promulgated because people who lack insurance just don’t seek treatment for depression, anxiety, drug abuse, or other such conditions until they become unbearable or life-threatening.

Cavalier claims that young people don’t consider the importance health insurance are also suspect. The ones that have it are clearly using it, and the others are probably gritting their teeth and ignoring their pain; I know anecdotally of several who are delaying important treatments such as dental care for lack of coverage.

So what will happen if we suddenly make insurance available to these people? (Note that there is no guarantee the ACA will succeed in making this happen. Success depends on Medicaid expansion, making health exchanges usable, and attracting affordable insurance policies—all of which are resisted by many states and insurers.)

The benefits the US will reap by treating all the untreated mental illness are incalculable. People will rejoin the work force and contribute to the government’s revenue pool instead of drawing from it. People will stay in school and develop talents that improve the economy. When they have children, those children will grow up in a healthier and more stable environment, and in turn will engage in less crime and do better in school.

Can the health care system tolerate another $7,000 per year for another big chunk of the population? As I’ve shown, the benefits are worth it, but the costs might not be so bad either. First, diagnosing and treating mental illness earlier may head off (no pun intended) serious conditions. Second, we are making great strides in finding low-cost methods using mobile apps and gamification to ameliorate some forms of mental illness—notably attention deficit disorder, depression, and post-traumatic stress syndrome.

The ACA creates a new day for mental illness treatment in two ways. First, it has the potential (as I said before) to bring health insurance to the vast majority of the population. Second, it makes mental health coverage an essential service that insurance plans will have to treat like surgery and other physical health conditions. Between these advances, society can start dealing with the scourge of depression, anxiety, substance abuse, and other such conditions. It may cost us more, but we’ll get the money back in other ways.