For restaurant general managers, we offer a more extensive plan where the company pays 60% of the premiums. However, only about 6% of crew-level employees and 60% of general managers sign up for health-insurance coverage.
These low participation rates surprised me. So over the past couple of years I have asked CKE employees what motivated their decisions. Our crew-level workers tend to be younger, and perhaps unsurprisingly some told me they were unconcerned about illness or injury. Others already had insurance through a spouse or parent. A significant number said they declined coverage because they could get medical treatment “for free at the emergency room.” Among those who had signed up, many said it was because they were concerned about developing a medical condition (perhaps due to a family history of illness), and then being unable to get affordable coverage due to this pre-existing condition.
These kinds of responses are why I question the ACA’s viability. The new law’s success depends on young, healthy people who are lower-risk signing up for health insurance to offset the costs of insuring individuals who are at higher risk. If predominantly high-risk individuals sign up, health insurance is going to be very expensive. Yet, even after the ACA takes effect, people will still be able to get medical care at the emergency room. Further, the ACA prohibits insurers from denying coverage because of pre-existing conditions. In other words, individuals will no longer have much incentive to get health insurance as a hedge against the possibility of developing a medical condition.