The Department of Health and Human Services had projected that 40 percent of enrollees in the Affordable Care Act’s health-care exchanges would be between the ages of 18 and 34, but following the open-enrollment deadline, just 28 percent of enrollees are in that age group, according to Philip Klein of the Washington Examiner. This number could worsen, too: Young adults are probably more likely to be among the millions of “enrollees” who select a plan but then don’t pay for it (since they don’t really want insurance in the first place).
That said, HHS’s projection isn’t quite the one that matters for the fiscal and actuarial success of the law. The key question regarding the age breakdown of enrollees is how it compares to what insurers expected when setting their rates for 2014, though it’s certainly possible that looked like HHS’s projection. Moreover, 28 percent is an average of all the enrollees nationally, while what matters is the age breakdown in individual states, each of which makes up its own risk pool (meaning financial risk is shared among insurers and plans). And lastly, even more important for insurers’ balance sheets this year, their rate setting for next year, and the future of the law is whether people on the exchanges are sick or healthy, as I’ve explained on the Agenda. Insurers have some wiggle room to adjust premiums for how old people are, but they can’t ask anything about health status before someone enrolls, let alone charge a different rate based on health status.
Preliminary indicators suggest that the enrollees may be much sicker than insurance customers had been (again, more on this at the Agenda), but insurers don’t have much time to adjust for this or figure it out. Premiums for 2015 have to be set over the next month or two, which is why some insurers are calling the situation an “actuarial nightmare.” That’s not a death spiral, but it’s not good.