WASHINGTON (Reuters) - The new private health plans available under Obamacare drew in fewer young and healthy Americans than needed for the administration to make healthcare reform a market success in the first wave of enrollment, an official report showed on Monday.
Twenty-four percent of the 2.2 million people who signed up for private coverage between October 1 and December 28 belonged to a target audience of 18- to 34-year-olds, according to the first administration report to provide a demographic breakdown on enrollment in the new plans offered under President Barack Obama’s healthcare law.
That compares with a target of closer to 38 percent set before the program’s botched October 1 rollout, when administration officials believed that about 2.7 million of a forecast 7 million enrollees for 2014 would be between 18 and 35.
Younger enrollees tend to be healthy and are needed to help offset the cost of covering older, sicker consumers, because Obamacare prohibits insurers from charging sick people higher rates and limits the cost premium they can assign to older policyholders.
Health policy experts say the administration may still get closer to that ratio by the time enrollment closes at the end of March, when more young Americans are expected to sign up to avoid the law’s penalty for not having any coverage.
“It looks like they are on target to net enrollment somewhere around 6 to 7 million people, if current trends continue,” said Dan Mendelson of the consulting firm Avalere Health.
Administration officials pointed to Monday’s data as an encouraging start, particularly given the technology failures that stalled access to the federal enrollment website HealthCare.gov in October and November.
“We are confident, based on the results we have now, that we’ll have an appropriate mix of individuals enrolled in coverage,” said Mike Hash, health reform director at the U.S. Department of Health and Human Services.
A failure to improve on the numbers could lead insurers to raise prices next year, strengthening the position of Republican opponents who claimed that Monday’s low enrollment number showed the program is too expensive and too limited for younger adults.
“There’s no way to spin it: youth enrollment has been a bust so far. When they see that Obamacare offers high costs for limited access to doctors - if the enrollment goes through at all - it’s no surprise that young people aren’t rushing to sign up,” said Brendan Buck, spokesman for House of Representatives Speaker John Boehner, a Republican.
Data released on Monday showed the vast majority of enrollees were benefiting from federal subsidies, which can help pay premiums and out of pocket expenses, not only in the 36 states served by the federal government but also in New York - one of the largest states to operate its own health insurance marketplace.
New York state said in its report that the Obamacare plans available to residents are 53 percent less expensive on average than coverage purchased directly from insurers last year.
About 30 percent of the 230,624 New Yorkers who enrolled in a health plan as of December 24, are under the age of 35.
New York offered demographic data that the Obama administration has yet to produce, saying that about 44 percent of new enrollees were uninsured when they applied for coverage with the largest portion - 62 percent - among those with the lowest incomes.
“These enrollment figures are encouraging for this stage in the process, especially with all the early systems problems they experienced,” said Larry Levitt of the nonpartisan Kaiser Family Foundation. “We’re at half-time in the open enrollment period, and I would expect larger numbers of young people to enroll in the second half.”
Senior administration officials said that younger adult enrollment surged eight-fold in December when HealthCare.gov was working relatively smoothly for the 36 states it serves. They expect the number to grow strongly in the remaining three months as the government ramps up its public outreach campaign.
“The numbers show that there is a very strong national demand for affordable healthcare made possible by the Affordable Care Act,” said U.S. Health and Human Services Secretary Kathleen Sebelius.
More than 9 million people have now gained coverage under the Patient Protection and Affordable Care Act, administration officials estimate.
In addition to the private insurance plans, nearly 4 million people have qualified for the Medicaid program for the poor, while 3 million people in their early 20s are now allowed to remain on their parents’ plans.
The data showed that more women than men (54 percent versus 46 percent) have signed up for health coverage under Obamacare.
About 80 percent of enrollees, both in New York state and in the 36-state federal marketplace also opted for “silver” and “bronze” plans, categories that offer lower premiums but higher deductibles, a development that analysts said could encourage more employers to consider similarly configured plans for their workers down the road.
A recent report from the Kaiser Family Foundation said having younger adults make up only 25 percent of enrollees would present a “worst case” scenario. They found that costs then would be about 2.4 percent higher, but insurers would retain a very slim profit margin.
As a result, the Kaiser authors projected the companies would raise premiums by a commensurate amount, but not enough to destabilize the market.
Additional reporting by Sharon Begley, Susan Cornwell and Roberta Rampton; editing by Michele Gershberg and Sandra Maler