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 The insurance industry has increasing cause for concern as early
enrollment reports suggest a trend that could cause insurance
premiums and deductibles to rise sharply. Along with the paltry
enrollment numbers released this week, officials in a handful of
states said those who had managed to sign up were generally older
people with medical problems.
Insurers have warned that they need a wide range of people signing
up for coverage because premiums paid by adults in the younger and
healthier group, between 18 and 35, are needed to offset the cost of
carrying older and sicker customers who typically generate far more
in medical bills than they contribute in premiums.
The first set of enrollment data revealed that 106,000 people signed
up for coverage nationwide, far short of the 500,000 initial
sign-ups the Obama administration had expected. In states where
officials discussed more detailed information, it also became
apparent that the people who flocked to the exchanges after they
opened Oct. 1 were those who were desperate for coverage.
In California, the state with the largest uninsured population, most
of those who applied were older people with health problems,
according to a state health care official. In Kentucky, nearly 3 of
4 enrollees were over 35. In Ohio, groups helping with enrollment
described many of those coming to them as older residents who lost
their jobs and health coverage during the recession.
"They have been putting off treatment for a long time, just praying
they live until they turn 65 and qualify for Medicare," said Lisa
Hamler-Fugitt, executive director of the Ohio Association of
Foodbanks, which received federal grant money to help people
establish coverage.
That people with serious health conditions would be the first to
take advantage of the Affordable Care Act was expected. But that
direction must shift.
In general, someone in his 60s uses $6 in health care services for
every $1 tallied by someone in his 20s, said Nicole Kasabian Evans
of the California Association of Health Plans. That makes younger
adults a coveted group on industry balance sheets.
If those signing up trend to the elderly and sickly "your insurance
is going to cost more and that will discourage those younger people
from coming in," warned Lisa Folberg, a vice president with the
California Medical Association. Faced with steep prices, younger
people could opt to pay a government fine rather than purchase
coverage.
The potential for rising monthly premiums and higher policy
deductibles is just one deterrent to convincing young people to sign
up for coverage on the exchanges. The technological problems that
have plagued the federal exchange, which is running in 36 states,
and many state-run online marketplaces are slowing enrollment. And
scattered reports of data breaches have the potential to scare off
even more people.
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Efforts to attract adults younger than 35, often referred to as
"young invincibles," include multimillion-dollar advertising
campaigns, which have launched in several states.
In California, Peter Lee, director of the state-run health exchange,
said his state's outreach effort taps social media, radio and TV
ads, and events at churches, community centers and other venues. To
emphasize the point, Covered California included a 27-year-old man
who had signed up for coverage during its news conference earlier
this week. Such an approach aims to counter the current trend in the
state. Lee described October enrollees in California as "older
people or people who have health conditions."
"These are people that have been waiting a long time to get
covered," he said.
In Colorado, an aggressive campaign from allies of the state-run
exchange includes provocative ads. One targeting women combines the
promise of free birth control pills with the notion of casual sex.
Another ad shows women with a contraption made of alcohol shot
glasses glued to an old snow ski. "Saving money on flu shots leaves
us more money for fun shots," the ad reads. The day the health
exchange launched, male and female models wearing nothing but
underwear and "Get Covered" signs passed out fliers on a downtown
Denver street.
It's not clear whether the campaign is working. Colorado's exchange
has yet to release a demographic breakdown of the 3,700 people who
selected an individual policy last month.
"We are making an extra push to reach young adults, and we do expect
they're going to take a lot of encouraging because they tend to wait
until the last minute," said Myung Kim, spokeswoman for Colorado's
exchange.
If such efforts fail and insurance companies end up with too many
sick or expensive customers, they might need to increase premiums or
eventually leave markets to avoid taking heavy financial losses.
"It's going to be very messy for the next couple of years, until we
figure out who is buying insurance," said Glenn Melnick, director of
the Center for Health Financing, Policy and Management at the
University of Southern California. "There are a lot of pieces of
this that are just black boxes right now."
Aetna Chairman and chief executive Mark Bertolini said last month
that it was "incredibly important" to get the exchange websites
running properly because "the younger, healthier people aren't going
to give them more than one shot."
[Associated
Press; MICHAEL R. BLOOD]
Associated Press writers
Roger Alford in Frankfort, Ky., Carla K. Johnson in Chicago, Tom
Murphy in Indianapolis, Ann Sanner in Columbus, Ohio, Juliet
Williams in Sacramento, Calif., and Kristen Wyatt in Denver
contributed to this report.
Copyright 2013 The Associated
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