by Robert Maynard
Surprise! Young people are refusing to pay the higher rates under Obamacare that are needed to subsidize te higher risk population. The fact that they are not signing up is referred to in this TownHall article as a “death spiral” for Obabacre:
Convincing throngs of young and healthy people to overpay for coverage in order to subsidize aging, sicker Americans was always going to be one of Obamacare advocates’ toughest tasks. In assessing the composition of healthy, sustainable risk pools, the administration pegged its target percentage of “young invincibles” at just shy of 40 percent. Coming up short of that goal would risk an adverse selection “death spiral” — or a politically radioactive bailout. The White House has been unusually tight-lipped about how the nationwide numbers are shaping up, and now we know why. Uh oh:
Just 24 percent of Americans signing up for coverage under President Obama’s health care law through December were part of the young adult demographic, the Department of Health and Human Services announced Monday — well below the nearly 39 percent the White House had once deemed essential to the law’s success. In a new report, HHS said that through Dec. 28 (about halfway through the six-month open enrollment period), roughly 2.2 million Americans signed up for coverage on one of the law’s health insurance exchanges. That’s well below the administration’s target of 3.3 million. And HHS still hasn’t disclosed how many of those who have signed up for insurance have actually paid their first premiums, which is necessary for enrollment to be finalized…in the report, HHS said that just 24 percent of those who signed up so far were aged 18 to 34. In December, a report from the Kaiser Family Foundation identified a “worst-case scenario” situation in which just 25 percent of enrollees were in the 18-to-34 demographic.
Twenty-four percent is below the “worst case scenario” outside analysts had previously envisioned. If insufficient numbers of young Americans enroll in Obamacare’s exchanges, insurers will be stuck with sicker, costlier risk pools. They’ll compensate for projected losses by jacking up rates on other customers, which could send additional comparatively healthy consumers heading for the exits. To forestall this crumble, the administration may tee up taxpayer-funded bailouts for insurance companies. They could expand a provision within the law that was designed to offer targeted, small-scale bailouts if specific companies ended up getting caught with the short end of the adverse selection stick in certain markets. Republicans are seeking to block this bailout scheme, and I can’t imagine the public is too excited about Democrats sending millions or billions to insurers because their trillion-dollar program has been a technological and demographic bust.