What Obama Was Actually Doing On “Between Two Ferns”

The mega-viral video of President Barrack Obama‘s comedy interview with Zach Galifinakis this week was a highly calculated move by the Administration. It was very funny and received over 15 million views. The Administration had a particular goal with the move: to appeal to young people and encourage them to sign up for healthcare through Healthcare.gov.

For the current version of Obamacare to be successful it is essential that healthy people sign up for coverage. Health insurance companies are currently struggling to cope with a higher level of “adverse selection” than they have ever experienced before. Adverse selection is a term in the insurance industry used to describe increased financial risk on insurance companies because of higher-risk policy holders. Prior to the Affordable Care Act (ACA), insurance companies could exclude pre-existing conditions and deny coverage to high-risk individuals. The ACA made it law that insurance companies could no longer deny health insurance coverage based on medical history. Without question, the new law resulted in a surge in applicants with current or previous medical issues.

How does an insurance company (or in this case an Administration) offset adverse selection? By enrolling healthy, low-risk people in healthcare plans to offset the cost of claims. One of the largest pools of “healthy” people is…. you guessed it: young people. On Between Two Ferns, President Obama was asking young people to sign up for healthcare and one of the goals was to fight adverse selection.

Whether you personally agree or disagree with the Affordable Care Act, there’s one major reason why it’s preferable if the Administration achieves its goal of signing up young people:

Young People Should Buy or Accept Health Coverage When Available

Health insurance is just as important for young people as it is for older people. The current cost of a hospital visit is astronomical. Even a fully-employed person in their 20s or 30s could be financially destroyed by an unexpected emergency hospital visit. I firmly believe that anyone who has a health plan available to them (whether it be through work, individually or government subsidized ) should take advantage of the coverage. It’s simply irresponsible not to obtain coverage for the purpose of financial protection.

Take a look at the numbers below – they are incredible. Protect yourself against an unexpected illness or injury and obtain health insurance if it’s available to you.

Mean hospital cost per stay by age*
85 or older: $9,900
65 to 84: $12,600
45 to 64: $12,500
18 to 44: $7,400
1 to 17: $8,400
Younger than 1: $4,500

Mean hospital cost per stay by payer*
Medicare: $11,900
Medicaid: $8,000
Private insurance: $9,200
Uninsured: $8,300
Other: $10,700

*Courtesy of BeckersHospitalReview.com