ObamaCare has youth problem

 

 

Too few young people are signing up for ObamaCare to stop premiums from rising, new data released by the administration on Monday show.

Only 24 percent of Obama-Care’s enrollees are young people, well below the 40 percent benchmark set by the administration for the critical 18- to 34-year-old age group. Older people, who are typically more expensive to cover, made up the single largest group of Obama-Care enrollees. 

ADVERTISEMENT
Thirty-three percent of the 2.2 million who had selected a plan through the exchanges as of December were between the ages of 55 and 64, the Health and Human Services (HHS) Department said Monday.

To keep premiums affordable, experts say it is vital that the law attract about that many young and healthy “invincibles” unlikely to need critical care to balance out older and sicker uninsured people who enroll and will be more costly to the system.

The administration struck a confident tone during a conference call with reporters, arguing that the law will work fine at present demographic levels.

HHS Secretary Kathleen Sebelius pointed to December data in arguing the percentage of young people who will enroll is likely to rise. She said the momentum with young enrollees “was particularly strong” in December, when the administration says it saw an eight-fold increase in the number of 18- to 34-year-olds signing up.

“We expected older adults to sign up early and we expect more young adults to come in by the end of the second enrollment period,” said Nancy Delew, the acting HHS secretary for planning and evaluation.

But Republicans quickly worked to discredit the numbers, sending out stories highlighting how the figures fell below the administration’s hopes.

“There’s no way to spin it: youth enrollment has been a bust so far,” said Brendan Buck, a spokesman for Speaker John Boehner (R-Ohio). “When they see that ObamaCare offers high costs for limited access to doctors — if the enrollment goes through at all — it’s no surprise that young people aren’t rushing to sign up.”

Some experts warned against reading too deeply into Monday’s data, claiming age won’t ultimately be the primary factor in determining what direction premiums are headed.

Rather, it’s the mix of healthy versus sick enrollees, they say — something that will likely be kept under wraps until later this year, when insurers have had time to process claims from the newly insured.

“The distribution of enrollees by health status is as important, if not more important, than the distribution of enrollees by age, as is how actual distributions by age and health status compare to the distributions that insurers expected when they calculated premiums,” said Cori Uccello, a senior health fellow at the American Academy of Actuaries.

Aaron Smith, the executive director for Young Invincibles, an ObamaCare advocacy group focusing on young adults, said that because the young tend to be healthy, they’re a good proxy for what kind of mix to expect, but the measure doesn’t “tell the whole story.”

“We won’t know how this will play out with premiums until later, so we have next three months to keep pushing for enrollments,” he said.

Smith cited a study released last week by The Commonwealth Fund that found 41 percent of those who visited HealthCare.gov in December were between the ages of 19 and 34. He said this was evidence the administration’s efforts to sign up young people were gaining traction.

Obama administration officials said they expect young adults to sign up in higher numbers before open enrollment ends on March 31, as many observers expected younger and healthier people would put off enrolling until the last second.

It was also expected that some of the nation’s sickest people who were uninsured would rush first to the new exchanges.

The 40 percent benchmark is for the end of March, which gives the administration time to raise the percentage of young people enrolling in ObamaCare, an effort it is advancing over the next three months with a major public relations and advertising campaign.

Centers for Medicaid and Medicare Services (CMS) spokeswoman Julie Bataille said Monday that a “sustained outreach effort” aimed at young people was underway. 

In addition to a planned ad campaign during the Sochi Olympics, Bataille said the HHS has conducted or planned more than 2,000 public education activities across the country, at music festivals and community colleges where young people are likely to frequent.

“We’re only halfway through open enrollment and we expect an increase in proportion of young adults as we go forward,” said Office of Health Reform Director Mike Hash.

Delew said the early demographics are in line with what the Massachusetts exchange experienced when it launched under then-Gov. Mitt Romney (R) in 2007.

A Kaiser Family Foundation study released last year said that if 18- to 34-year-olds made up only 25 percent of the pool of enrollees, as they do now, it would be a “worst case” scenario that could lead to higher premiums. Kaiser also said the administration’s target for that age group should be 40 percent, because that’s the proportion of young adults in the potential market for private plans on the exchanges.

But Gary Cohen, the deputy administrator and director for the CMS, said Monday that a target of 25 percent is a more accurate benchmark because that’s the total portion of 18- to 34-year-olds in the U.S. population.

Cohen said the administration was targeting everyone in that age group, not just the uninsured, because many who were previously insured in the private markets will seek out ObamaCare coverage for less expensive plans or to take advantage of federal subsidies.

The HHS said Monday that 79 percent of those who have selected a plan have received some financial assistance. Hash said the focus on Kaiser’s 40 percent number has been “overblown” because the report also says that even if the administration only hits the 25 percent mark, there would be no “death spiral” — only a modest rise in premiums next year. 

“The demographics we’re reporting are similar to our expectations,” Delew said. 

This story was posted at 4 p.m. and updated at 8:30 p.m.