Gen Z and millennial households have been able to keep health insurance costs manageable thanks to enhanced Affordable Care Act (ACA) subsidies introduced during the pandemic. But as those temporary subsidies have expired, healthcare is going to take a bigger bite out of younger adults' budgets. Rising premiums, higher deductibles and tougher plan trade-offs are forcing younger people to take a closer look at what they can and can't afford to pay for in healthcare.
Experts laid out ways Gen Zers and millennials can budget for healthcare in the face of the “ACA cliff.” The “ACA cliff” refers to these pandemic-era subsidies phasing out. These subsidies lowered premiums for millions of Americans, and as those supports phase out, “many are struggling to afford their health insurance premiums,” according to Dr. Noor Ali, founder at Dr. Noor Healthcare Advisor . As subsidy thresholds are tightening in most states, Dr. Ali said that “younger adults are being hit hardest because they built their budgets around those subsidies.” This means that overall plans are becoming “a worse financial deal for many Gen Z and millennial consumers,” she added.
While younger adults, on average, may have lower healthcare needs or risks, Dr. Ali warned that it's still risky “choosing low premium and high deductible just because they're young and healthy.” Anyone, at any age, can experience an unexpected illness or injury, which can then lead to staggering costs. “My advice is to choose a more balanced premium and deductible structure, because health status can change unexpectedly,” Dr. Ali said.
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