The more they learn about Obamacare, the more nervous insurers get. New data is out on the 2.2 million people who signed up for insurance by the first signup deadline (December 24), and the pool is much older than the general uninsured population. Avik Roy breaks down the numbers:
Here are the key figures. 59 percent of non-elderly adults who selected an exchange plan were older than 45, compared to just 32 percent of the uninsured population: a skew of 27 percent. On the other hand, 25 percent of non-elderly adults who selected an exchange plan were younger than 35, compared to 47 percent of the uninsured: a skew of 22 percent, for a total skew of 49 percent (27 plus 22).
As the WSJ reports, insurers hoped that the percentage of non-elderly adults under 35 would be closer to 40 percent, rather than the 25 percent we actually see. With the current rate, they are worried that they won’t have enough young people in the new pool to balance older, sicker patients, that and they will have to raise premiums as a result. Before this data came out, the Kaiser Family Foundation said that it would be a “worst-case scenario” if only 25 percent of non-elderly enrollees were in the 18-34 age group by the end of open enrollment on March 31st of this year.That’s still more than two months away, so the administration certainly has time to pull the numbers up. Other considerations also suggest this isn’t as bad as it might seem: Massachusetts’s Romneycare also saw more young people enroll as time went on, and age is not always the best way to measure demand. But if rates continue to hover near that 25 percent, the Kaiser Foundation paper says, costs would exceed premium revenues by about 2.4 percent. So to get to profitability, premiums would certainly have to go up. Kaiser thinks that the necessary increases probably wouldn’t trigger a death spiral, but it would certainly make the law more expensive than ever.