NEW YORK (Reuters) - About 12.7 million Americans signed up for 2016 health insurance coverage through the government insurance exchanges, surpassing its expectations, U.S. Health and Human Services Secretary Sylvia Burwell said on Thursday.
The government began offering subsidies for individual insurance in 2014 under the Affordable Care Act, often called Obamacare, and charges a penalty to Americans who do not have health insurance.
In 37 states, customers can buy these plans on HealthCare.gov, the federally run website, while the other states and Washington D.C. run their own online exchanges. Enrollment closed on Jan. 31 for 2016.
Avalere Health said that based on these numbers, it expects 2016 year-end enrollment will be about 10.2 million, above President Barack Obama’s administration’s forecast of 10 million people being covered through the exchanges.
Insurers have been struggling to make money on the exchanges, where low enrollment has contributed to high per-customer overhead and has made it a riskier business for them.
Medical costs have also been an issue for insurers in 2015, with many reporting that they have booked unsustainable losses on these products. UnitedHealth Group Inc in November said that it may exit the exchanges after 2016.
On HealthCare.gov, about 4 million new customers signed up for plans and another 5.6 million consumers returned to buy insurance again, Burwell told reporters on a call.
In all, about 2.7 million people aged 18 to 34 signed up for the insurance, she said.
Customers who are younger tend to have fewer medical costs and are considered an important factor in creating financial stability for the private health insurers like UnitedHealth, Aetna Inc and Anthem Inc that sell these plans.
Andy Slavitt, who runs the Centers for Medicaid and Medicare Services division of the health department, said that the enrollment numbers had surpassed the mid-point of its projection to have between 11 million and 14.1 million people signed up for 2016 health coverage at this point in the year.
Reporting by Caroline Humer; Editing by Chris Reese and Meredith Mazzilli