ObamaCare's big millennial problem

Young people aren't signing up for health insurance. That's a terrible sign for the Affordable Care Act.

Obamacare cast
(Image credit: (AP Photo/Charles Dharapak))

The early ObamaCare enrollment numbers are in and they are not impressive. Only 106,000 people have signed up for health insurance through the Affordable Care Act's exchanges, far less than the 500,000 that the White House had hoped for.

Even worse, many of those who signed up were older people with medical issues, state officials told the Associated Press. That is extremely ominous news for the long-term viability of ObamaCare.

There was a reason that the Colorado Consumer Health Initiative released those terrible "brosurance" ads: The exchanges need young, healthy people to offset the costs of insuring old, sick people. If that doesn't happen, ObamaCare could face the dreaded "death spiral" scenario, in which insurance companies, overburdened with ailing customers, are forced to raise premiums, further discouraging young people from signing up.

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The White House has estimated that it needs two younger people to sign up for ObamaCare for every three older people. Right now, the Obama administration hasn't released any hard figures, so we only know what state officials are saying.

In Kentucky, according to AP, nearly three out of every four enrollees were over the age of 35. That is not a great sign.

Young people who don't qualify for government subsidies — basically, people who make more than $45,000 a year — don't have a huge incentive to sign up for health insurance they might not even use. The $95 tax penalty for failing to buy insurance might seem worth it to a 30-year-old who would otherwise have to spend $400 a month on a private health-insurance plan.

Tack on the lackluster economic prospects for many millennials, and you have a recipe for resentment toward ObamaCare, writes Cathy Reisenwitz at Forbes:

Looking at rates of homeownership, 83 percent of elderly households own a home. Meanwhile, 36 percent of millennials are still living under their parents’ roof.

Not only are many young people either unemployed or underemployed, the Consumer Financial Protection Bureau estimates that people under 40 owe 67 percent of the roughly $1.4 trillion that Americans owe on school loans. That’s on top of an average of several thousand dollars of credit card debt.

ObamaCare forces people who can scarcely afford the extra cost to subsidize care for people who absolutely can afford to pay for their own health services. [Forbes]

This, of course, is one point of view. Plenty of millennials want health coverage. But there is definitely less pressure for a young person, especially one who leans conservative, to sign up for insurance through ObamaCare. The White House's latest fix could make the problem even worse.

On Thursday, Obama announced that insurers would be allowed to offer people their old plans, which would otherwise be canceled because they didn't offer "essential benefits" like maternity coverage or mental health benefits.

There is a decent chance that insurance companies will simply decide not to renew canceled plans. If they do, however, many of the people who will keep their cheaper, less-comprehensive plans will probably be in that healthy, under-35 demographic that ObamaCare needs so badly.

Not that it's time to panic. "In the first month of enrollment," writes The Washington Post's Sarah Kliff, "more older people than young would be expected to sign up, as the older folks would be the most anxious to get coverage because they would anticipate having higher health-care costs."

Younger people have until March 31 to sign up and avoid the tax penalty. If they haven't purchased insurance plans by then, the Affordable Care Act could be in serious trouble.

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