Obama Administration Says 28% of Health-Law Enrollees Are Young -- Update 2
By Louise Radnofsky and Anna Wilde Mathews
WASHINGTON--Just more than a quarter of the eight million people who signed up for health plans under the Affordable Care Act are in the prized demographic of 18 to 34 years old, falling short of the figure considered ideal to keep down policy prices.
The data, released Thursday by the Obama administration, painted a more complete picture of enrollment in the plans. They show that about 28% of people picking plans on the state and federal insurance exchanges by April 19--after most states' enrollment deadlines passed--were 18 to 34 years old, a generally healthy group. The proportion is higher than previous counts. But it is significantly below the 40% level that some analysts consider important for holding down rates by balancing the greater medical spending generated by older enrollees.
Insurers right now are setting rates for 2015, and the age data will be a key factor in their decisions. Some insurers say that despite seeing a late surge in younger enrollees, their sign-ups still skewed older overall than they had expected.
One big insurer, Florida Blue, had projected an average age for enrollees in the late 30s, but instead is seeing a figure in the low 40s. The difference is "significant," said Senior Vice President Jon Urbanek. It would "tend to drive a higher rate increase" for next year, he said. But the impact is likely to be blunted by provisions in the law designed to compensate insurers that end up with higher-than-anticipated medical claims.
Federal officials said Thursday they were comfortable with the balance of risk in the new insurance markets in their first year of operation.
"We believe, based on the data that we've seen and the independent data that is out there, that premiums will be stable and that the risk pool is sufficiently large and varied to support that kind of pricing," said Michael Hash, a top official overseeing the health law's implementation at the Department of Health and Human Services. He added that he believed that to be the case "in every state."
The 28% proportion falls short of the 40% share that young adults represented in the potential target population for the exchange plans, according to an analysis by the Kaiser Family Foundation. But for the insurance industry, the key is how the demographics of the sign-ups stack up against assumptions they made when they set their rates.
The health law bars insurers from charging riskier consumers more, and as a result, the health plans have said they need a large number of younger people and men to sign up to balance out the likely higher medical claims incurred by older people and women. Insurers view women as costlier to cover because of pregnancy and other female health needs.
The administration said previously that through Feb. 28, 25% of enrollees had been 18 to 34 years old.
The federally run exchanges serving 36 states had allowed most people until April 15 to sign up for coverage for the year. Some of the 14 state-run exchanges set deadlines for a few days later, and in a small number of those states, people were able to sign up through April 30 or after.
In earnings calls in recent days, major insurers have offered a mixed assessment of their exchange sign-ups. WellPoint Inc. has said its enrollees appear generally in line with its projections, and it expects to earn a small profit on the business this year.
Aetna Inc. said its enrollees were a bit older than it expected, and it will see a small loss.
Cigna Corp. said that early enrollees appeared to be using medical services at a faster clip than anticipated, and it, too, expects to lose money this year on its individual business, which includes the health-law exchanges.
But insurers and industry experts said age isn't a complete proxy for likely health costs. "There are 25-year-olds with leukemia and 25-year-olds who are running marathons," said Tom Snook, an actuary with Milliman Inc. who is working with a number of insurers offering exchange plans. "Clearly we don't know the whole picture when we know age."
Health-insurance actuaries say some provisions in the law could force rate boosts this year, including the ratcheting-up of a tax on insurers. But the Congressional Budget Office has suggested that exchange premiums will rise more slowly than previously thought.
WellPoint said in March it expected possible "double-digit-plus" rate increases, though this week it told analysts the impact will vary by market.
Aetna said last week it expected to seek premium increases for next year's rates that could range from "low single digits to over double digits" percentage-wise. Aetna said the upper end of that projected range generally referred to boosts in the teens, though a handful of its markets could see rates rise more sharply than that.
Other demographic data released by the administration Thursday also pointed to a more expensive enrollee mix.
For instance, some 54% of enrollees were female. And the proportion of Latino enrollees, viewed as trending younger and healthier than some other groups, also was lower than anticipated. About 10% of people who signed up through the federally run exchanges and reported their ethnicity said they were Latino, the administration said, though those figures don't include big state-run exchanges such as California's.
The sign-up surge in the final weeks of enrollment that took the customer count past original projections to eight million came chiefly from states that were hostile to the law and had turned over the task of implementing it to the federal government.
States including Florida and North Carolina, led by Republican governors opposed to the law, significantly exceeded internal enrollment estimates crafted by federal officials on the eve of the law's rollout. Florida ended up with 983,775 sign-ups, compared with an anticipated 477,000, and North Carolina had 357,584 enrollees compared with an initially expected 191,000.
Meanwhile, states that were so enthusiastic about the law that they decided to run their own exchanges almost all fell short of targets the Obama administration had set.
Some of those states, such as Maryland, Massachusetts, Nevada and Oregon, had technical problems that hobbled their exchanges, with problems in some cases outlasting the bulk of the problems with HealthCare.gov.
The federal government reported that Nevada had 45,390 sign-ups through April 19, and that it had originally expected around 115,000.
Federal officials said Thursday for the first time that they believed as many as 87% of the approximately five million people who applied through federally run exchanges for tax credits toward the cost of premiums may have been uninsured, though they said those numbers weren't definite.
They said they didn't expect to have data on the percentage of enrollees who made their first premium payments until later this year.
The Centers for Medicare and Medicaid Services also said there were around 4.8 million additional people in Medicaid and the Children's Health Insurance Program between October 2013 and March 2014 compared with the number of people who were in the programs between July and September 2013. It will not be clear until later how many of those people were newly qualified for the program as a result of 26 states expanding eligibility for Medicaid under the law.
Write to Louise Radnofsky at email@example.com and Anna Wilde Mathews at firstname.lastname@example.org
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