Young adults fuel final surge in health insurance enrollment

WASHINGTON — Nearly half of the 8 million Americans who signed up for marketplace health insurance did so in the final seven weeks of the six-month enrollment period that ended April 19, the Obama administration reported Thursday.

Enrollment doubled since March 1 in 17 states, including Georgia, Texas, Florida, Louisiana, Mississippi, Missouri and South Carolina.

The late scramble for coverage netted 3.8 million new enrollees nationwide in March and April, including nearly 1.2 million young adults ages 18 to 34, who accounted for 31 percent of the final enrollment surge.

In the past seven weeks, those young adults more than doubled their national enrollment totals from the previous five months. Overall, the coveted young adult population accounted for 28 percent of state and federal marketplace signups.

That’s short of the 40 percent the Obama administration originally sought, but it is likely strong enough to prevent a “death spiral,” in which premiums would increase next year because of a lack of young health-plan members. As the higher rates make insurance less affordable, some fear that even more young people would forgo coverage, until the market ultimately implodes.

“We believe based on the data that we’ve seen and independent data that’s out there, that premiums will be stable and that the risk pool (of policyholders) is sufficiently large and varied,” said Michael Hash, director of health reform at the U.S. Department of Health and Human Services.

Young adults are important because they typically require less medical care, making them cheaper to insure. The resulting savings are needed to offset the coverage costs for older plan members, who are generally sicker and more costly to cover. If young people don’t enroll in sufficient numbers, premium revenues in the individual insurance market won’t cover the cost of medical care.

But individual insurance premiums are based on a statewide risk pool that includes coverage purchased both inside and outside the marketplace. Enrollment statistics on the estimated 5 million people who bought non-marketplace coverage hasn’t been reported, so it’s unclear how those enrollees will affect premiums in 2015.

The Congressional Budget Office estimates that the national average cost for a marketplace “benchmark” plan — an area’s second-lowest-priced “silver” plan, which covers 70 percent of medical costs — is $3,800 in 2014. The CBO expects that benchmark premium to rise to $3,900 in 2015.

Of the 8 million new marketplace enrollees, 85 percent are getting financial assistance to help cover the cost of coverage and 65 percent have selected silver plans.

The true determinant of premium costs will be the health status of new plan members, which won’t be known until they start seeking medical care. Insurers will submit their 2015 premium rate proposals in the next few months, despite having only one to five months of claims information on new marketplace enrollees.

Before the new enrollment data was released, the Republican-controlled House Energy and Commerce Committee released a survey of 160 insurers that suggested only 67 percent of federal marketplace enrollees had paid their first month’s premium.

But more than 300 companies are selling plans on the federal marketplace, and many insurance executives have said 80 percent to 90 percent of their new plan members have paid.

White House spokesman Jay Carney called the report “partial information packaged in a way to try to undermine what must be a depressing reality to those who want to repeal the Affordable Care Act.”

Data on paying plan members won’t be available from insurers for some time, said Julie Bataille, communications director for HHS’ Centers for Medicare and Medicaid Services. “At this point, I don’t anticipate having it until later this year,” she said.

It’s also unclear how many marketplace enrollees were uninsured when they secured coverage. Of nearly 5.2 million who applied for financial assistance through the federal marketplace, only 13 percent — about 695,000 — indicated that they currently had health coverage.

“We think it’s not very reliable,” Hash said of the figure, citing other reports that showed higher rates of current coverage for new plan members.

Of the 8 million new enrollees, 54 percent are female, continuing a history of disproportionate female representation in the individual insurance market, which is purchased outside workplaces.

Since the third quarter of 2013, an additional 4.8 million people also have enrolled in Medicaid, the state-federal health program for low-income and disabled Americans. Twenty-six states and the District of Columbia have expanded eligibility for Medicaid under the health-care law, but it’s unclear how many of the new Medicaid beneficiaries are among the newly eligible.

Of the 8 million people who selected marketplace plans, more than 5.4 million did so through the HealthCare.gov website. The rest signed up through state-run marketplaces. Forty-seven percent of the new enrollees — about 3.8 million — enrolled in March and April.

The federal marketplace application includes optional questions on an applicant’s race and ethnicity.Thirty-one percent chose not to answer or reported “other.” Of those who answered the question, 63 percent were white; nearly 17 percent were African-American; nearly 11 percent were Latinos, who can be of any race; and 8 percent were Asian.

The Congressional Budget Office estimated last month that the Affordable Care Act will increase the proportion of working-age adults with insurance from 80 percent to about 84 percent in 2014 and to roughly 89 percent in 2016 and beyond.

In raw numbers, 12 million more working-age adults will have health-care coverage in 2014 because of the Affordable Care Act. The number grows to 19 million in 2015, 25 million in 2016 and “26 million more will be insured each year from 2017 through 2024 than would have been the case” without the law, according to the CBO report.