Not enough young people bought Obamacare

Source: MARKETWATCH

Just 24% of enrollees are 18 to 34; more needed to prevent rising rates

By Jonnelle Marte, MarketWatch

Last Update: 8:11 AM ET Jan 14, 2014

Young people are warming up to Obamacare, but more will need to sign up in the coming weeks to avoid a rise in insurance rates, health experts say.

Just 24% of the 2.2 million people who chose insurance plans through the state and federally run insurance exchanges by Dec. 28 were between the ages of 18 and 34, according to the Department of Health and Human Services, which released demographics data on enrollees for the first time on Monday. Health pros say thats below expectations, with one estimate from the Kaiser Family Foundation finding that about 40% of the people expected to enroll in insurance plans would be in that age group.

If more young people dont sign up for insurance before the end of the enrollment period on March 31, consumers may face higher insurance rates next year, experts say. Thats because insurance companies would find themselves without enough younger and healthier customers to help offset the costs of covering older and sicker Americans, says Caroline Pearson, vice president of Avalere Health, a strategic advisory firm. But it is our expectation that the age mix will improve throughout the open enrollment period.

To be sure, its not clear yet how the final breakdown of the people who buy insurance will impact rates. Some insurers may have set rates with a more pessimistic outlook, expecting a smaller share of young people to sign up for coverage, while other insurers may have expected a larger share of young adults to sign up, says Pearson. With two and a half months left in the open enrollment period, the mix of people who sign up can still change. And government officials said the interest theyve seen from young people so far has been encouraging. Were confident based on the results we have now that well have an appropriate mix of people enrolled for coverage, said Michael Hash, director of the HHS Office of Health Reform, during a conference call on Monday.

Not surprisingly, most of the young people who signed up did so during December, when the exchanges started working better and as the deadline approached for choosing plans that would be effective by Jan. 1. The number of 18- to 34-year-olds signing up through HealthCare.gov during December was eight times as many as in October and November; for the overall population, in contrast, sign-ups were five times what they were in the preceding months.

(Also see: Why hardly anyone signed up for Obamacare http://www.marketwatch.com/story/why-hardly-anyone-signed-up-for-obamacare-2013-11-13.)

Some states are seeing more enthusiasm from the young than others. The District of Columbia, for instance, reported that 44% of its enrollees are young adults between the ages of 18 and 34, compared with 24% overall in the state and federally run exchanges. In Massachusetts, 31% of enrollees are ages 18 to 34, as are 29% of people choosing plans in Utah.

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