Obamacare: Who signed up so far…and why it matters
The healthcare.gov website and the various state-run marketplaces saw more than 2 million individuals enroll in private health plans by the end of 2013. In addition 1.6 million enrollees were identified as Medicaid-eligible. This is an impressive result despite the rocky launch of the federal website when it went live in October.
In a recent report the government provided some insight as to the demographics of enrollees. Some interesting highlights from the data include:
- Subsidy – 79% of the enrollees received some form of subsidy when they signed up
- Gender – 54% of enrollees were women and 46% were men
- Coverage – 60% selected a silver level plan and 20% selected a bronze level plan
Perhaps the most concerning data comes from the predominant advanced age bracket of the enrollees. Thirty-three were between ages 55-64. This is to say that 70% of the enrollees are 35 or older which is a much older demographic than predicted. Most experts believe that in order for the finances to work, roughly 40% of the enrollees need to be between the ages of 18-34 whereas the actual percentage in that age bracket is 24%. If younger enrollees do not sign up in much greater numbers, it is assumed that insurers will need to adjust rates for the increased risk potentially making the ultimate cost of Obamacare significantly higher than forecasted. In fact, the Kaiser Family Foundation recently stated that if young adults make up only 25% of enrollees, it would present a worst-case scenario for the future of Obamacare.
While there is still time for these numbers to turn around before the March 31st deadline, we have reason to be concerned. Congressional analysts estimate a total enrollment of about 7 million after the first six months. In order for the numbers to shake out, 2.7 million of those individuals will need to be under age 35. Mind you, this age group is notorious for procrastinating. Add that to the fact to the penalty for not having coverage is low, it’s not enough of an incentive to buy an expensive health insurance policy. Let’s also not forget that many of these individuals are eligible to stay on their parents plan until age 26, and most of them are doing so. Perhaps it’s too early to tell, but it seems to me that the deck is stacked against a high percentage of young enrollees in the healthcare marketplaces which could ultimately shift more costs onto the private sector. We have a few weeks left, I sincerely hope I am wrong!
About the Author
Kathleen McSherry is a Senior Vice President at William Gallagher Associates in the Employee Benefit Group with a core focus on compliance and communications. Her responsibilities include educating clients on applicable local, state and federal regulations affecting their insurance programs and employees. She also acts as a liaison between WGA’s ERISA attorney and the entire benefits department.
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