HealthCare.Gov Sign-Ups Skewed Toward Older – Raising Fears over Costs

The Wall Street Journal

Numbers announced yesterday indicate one-third of health plan enrollees in the new insurance marketplaces are 55 or older, a figure that insurers said makes the pool older than they would need to sustain their coverage at current premiums.

Just under a quarter of the roughly 2.2 million people who signed up for private plans nationwide by Dec. 28 were between the ages of 18 and 34, while one-third were in the 55-to-64 range, just short of the age at which most qualify for Medicare. Kaiser Family Foundation, a health-policy think tank, has said census data suggest that about 40% of people who could be buying coverage through the exchanges are in the 18-to-34 group.

Under the 2010 Affordable Care Act, consumers no longer pay premiums based on their health risks. To prevent a sharp rise in premiums in 2015 and beyond, carriers say they need strong enrollment from younger people who are likely to be healthier. That would balance out the bills racked up by sicker and older people.

Still, the small share of younger customers “is more negative than we thought it was going to be,” said Allan Einboden, chief executive of Temple, Texas-based Scott & White Health Plan.

Break Away from the Static

The health law allows for extra government payments in the initial years to insurers that get stuck with an especially unhealthy pool of enrollees. That could limit the need for them to raise prices right away if the 2014 numbers aren’t favorable. Also, the law allows insurers to charge older enrollees up to three times as much as young people, adding some protection for an older pool.

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Before the health-law rollout, fewer than 20% of enrollees in individual and family coverage were over age 55, said Jim Whisler, an actuary for Deloitte LLP, citing an analysis of health-plan data, including Deloitte clients.

“I would be quite concerned” about the new federal enrollment figures, Mr. Whisler said.

Overall enrollment numbers varied widely among states. Only 118,532 people enrolled in private plans in Texas, the nation’s second most-populous state after California, while 107,778 enrolled in North Carolina, which has fewer than half as many people.

California, which is among the states operating its own exchange and has more than six million uninsured residents in all, continued to lead the country in enrollment numbers, with 498,794 people reported to have signed up for private coverage.

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