Obamacare supporters have always feared that the young and the healthy won’t sign up for insurance in large enough numbers to make Obamacare work. Without enough enrollees in the that demographic, the system would experience an “adverse selection” death spiral in which only the sick and the old sign up, pushing premiums higher. In a worst case scenario, those higher premiums would in turn kick more people out of the pool, and so on, until the system collapses under its own weight.
The Journal reports that these early fears are starting to be realized: those who have so far bought insurance on the federal exchanges are on average older than insurers expected:
The numbers demonstrate a real-world fallout from the digital snafus: Less-healthy customers are more likely to persevere through technical obstacles to gain coverage, insurers say. Younger, healthier customers who feel less need for insurance—but whose widespread participation is important to the financial success of the system—could be quicker to give up.
The average enrollee age at Priority Health, a Michigan insurer, has ticked up to age 51 for newcomers, from about 41 years old for plans offered for the current year, said Joan Budden, chief marketing officer. Arise Health Plan, Wisconsin’s largest nonprofit insurer, said more than half its 150 signees are over 50, a higher proportion than expected, while declining to be specific on its target age.
As with most every story we’re reading about the Affordable Care Act right now, we don’t know if we’re looking at a lasting effect or a temporary blip. But so far the enrollee demographics seem to be a first step towards exactly what the opponents of the law predicted and its supporters feared: insurance pools are trending older. We’ll be watching closely to see if this initial trend becomes a spiral.