REPEAT-Early Obamacare data show older Americans more apt to sign up

Reuters

By Lewis Krauskopf

Nov 20 (Reuters) - More older Americans than young adults sofar have signed up for new insurance coverage under the statemarketplaces created by President Barack Obama's healthcare law,according to early data from four states reporting details ontheir enrollment.

The age balance is being closely watched to determine thefinancial stability of the insurance market created by theAffordable Care Act, as the participation of younger people isneeded to offset costs for sicker beneficiaries. To ensure thatyounger people sign up, the law requires individuals to pay apenalty if they do not have health coverage.

The Obama administration is aiming to enroll about 2.7million 18- to 35-year-olds in the exchanges by the end ofMarch, out of 7 million total, or about 38 percent.

Early data from Connecticut, Kentucky, Washington andMaryland show that so far more than 20 percent of the 23,500combined enrollees in private insurance plans are 18 to 34 yearsold, ranging from about 19 percent in Kentucky and Connecticutto about 27 percent in Maryland. About 36 percent of enrolleesacross the four states are 55 to 64 years old. Additionaldemographic data is expected from California on Thursday.

The federal government last week reported that 106,000people had signed up during roughly the first month of theenrollment period.

Health policy experts and actuaries said it was premature todraw any conclusions from the initial demographic data, with onelikening it to "trying to call an election when you only have 10percent of the returns."

Still, Steven Schramm, managing director of Optumas, astrategy and actuarial firm that works with state Medicaidprograms and exchanges, said 20 percent was surprising at thisstage, given that healthcare advocates were expected to targetmore elderly Americans at first to make sure they got enrolled.

"We really thought the 55-to-64 percentage would be veryhigh initially," Schramm said. "The first people who show up forany (healthcare) program are the riskiest people."

A spokeswoman for Kentucky's exchange, which has enrolled atotal of 8,780 people in private plans as well as more than39,000 in Medicaid plans for low-income residents, said it "hasbeen pleased with the enrollment numbers in all age groups."

MASSACHUSETTS EXAMPLE

The experience in Massachusetts, which enacted comprehensivehealth reform about seven years ago, suggested that youngerpeople would be slower to participate. Evidence in the stateshowed that, of those who received subsidies, those with healthissues joined earlier on, said Rosemarie Day, who was chiefoperating officer of the Massachusetts Health Connector at thetime.

"Healthy people signed up, but they were more likely to waitfor the deadline," said Day, who now consults on healthcarereform programs.

Younger adults are less likely to understand the value ofhealth insurance, so they may need more persuading orinformation before coming around, Day said. They also tend to bemore tech-savvy and inclined to sign up online, so may be turnedoff by the bad publicity about the problems with the federalwebsite designed to enroll people, she said.

"I would expect them to have a slower trajectory," Day said."I don't think it's any cause for major alarm at this point.It's early in this process - very early."

Insurers in the exchanges can only charge older adults threetimes as much as young adults for premiums. But per capitahealthcare spending in 2012 for those 55 to 64 years old was$8,920 compared with $2,548 for those 19 to 25, or 3.5 times asmuch, according to a study of employer-based coverage by theHealth Care Cost Institute.

"This is compressing how much rates can vary compared to howmuch spending itself can vary," said Cori Uccello, senior healthfellow at American Academy of Actuaries.

"To help keep premiums more affordable and stable," said Uccello, "it's important to bring in this cross section of risk,including these young and healthy people."

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