Lack of younger enrollees a threat to Obama's health care law insurance exchanges

By Michael R. Blood

Associated Press

Published: Friday, Nov. 15 2013 8:51 a.m. MST

In this photo taken Saturday, Nov. 9, 2013 Cinthia Orozco gets help signing up for health insurance from Griselda Zamora, a health care specialist at a health fair in Sacramento, Calif. The lackluster showing for President Barack Obama's health care overhaul could foreshadow trouble for the embattled program. The plan relies on younger, healthier Americans, who are in less need of health care, to sign-up to cover the costs of expanding coverage to those with serious problems.

Rich Pedroncelli, Associated Press

LOS ANGELES — Among the concerns surrounding the rollout of President Barack Obama's health care overhaul was that too few young, healthy people would sign up — a problem that could undermine the financial viability of the federal law.

The insurance industry has increasing cause for concern as early enrollment reports suggest a trend that could cause insurance premiums and deductibles to rise sharply. Along with the paltry enrollment numbers released this week, officials in a handful of states said those who had managed to sign up were generally older people with medical problems.

Insurers have warned that they need a wide range of people signing up for coverage because premiums paid by adults in the younger and healthier group, between 18 and 35, are needed to offset the cost of carrying older and sicker customers who typically generate far more in medical bills than they contribute in premiums.

The first set of enrollment data revealed that 106,000 people signed up for coverage nationwide, far short of the 500,000 initial sign-ups the Obama administration had expected. In states where officials discussed more detailed information, it also became apparent that the people who flocked to the exchanges after they opened Oct. 1 were those who were desperate for coverage.

In California, the state with the largest uninsured population, most of those who applied were older people with health problems, according to a state health care official. In Kentucky, nearly 3 of 4 enrollees were over 35. In Ohio, groups helping with enrollment described many of those coming to them as older residents who lost their jobs and health coverage during the recession.

"They have been putting off treatment for a long time, just praying they live until they turn 65 and qualify for Medicare," said Lisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks, which received federal grant money to help people establish coverage.

That people with serious health conditions would be the first to take advantage of the Affordable Care Act was expected. But that direction must shift.

In general, someone in his 60s uses $6 in health care services for every $1 tallied by someone in his 20s, said Nicole Kasabian Evans of the California Association of Health Plans. That makes younger adults a coveted group on industry balance sheets.

If those signing up trend to the elderly and sickly "your insurance is going to cost more and that will discourage those younger people from coming in," warned Lisa Folberg, a vice president with the California Medical Association. Faced with steep prices, younger people could opt to pay a government fine rather than purchase coverage.

The potential for rising monthly premiums and higher policy deductibles is just one deterrent to convincing young people to sign up for coverage on the exchanges. The technological problems that have plagued the federal exchange, which is running in 36 states, and many state-run online marketplaces are slowing enrollment. And scattered reports of data breaches have the potential to scare off even more people.

Efforts to attract adults younger than 35, often referred to as "young invincibles," include multimillion dollar advertising campaigns, which have launched in several states.

In California, Peter Lee, director of the state-run health exchange, said his state's outreach effort taps social media, radio and TV ads, and events at churches, community centers and other venues. To emphasize the point, Covered California included a 27-year-old man who had signed up for coverage during its news conference earlier this week. Such an approach aims to counter the current trend in the state. Lee described October enrollees in California as "older people or people who have health conditions."

"These are people that have been waiting a long time to get covered," he said.

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