(Bloomberg View) — We were off for Good Friday, so you missed my thoughts on the health exchange enrollment numbers that the White House released last week. They were surprising numbers, in both good ways and bad. I'd hoped that over the weekend, I'd be able to tease out threads that made them more understandable, in an "obvious in retrospect" kind of way. But it's three days later, and, well, I'm still surprised.
First, the rundown. This is what the Barack Obama administration's release says:
- 8 million people signed up for private insurance in the Health Insurance Marketplace. For states that have Federally-Facilitated Marketplaces, 35 percent of those who signed up are under 35 years old and 28 percent are between 18 and 34 years old, virtually the same youth percentage that signed up in Massachusetts in their first year of health reform.
- 3 million young adults gained coverage thanks to the Affordable Care Act (ACA) by being able to stay on their parents plan.
- 3 million more people were enrolled in Medicaid and CHIP as of February, compared to before the Marketplaces opened. Medicaid and CHIP enrollment continues year-round.
- 5 million people are enrolled in plans that meet ACA standards outside the Marketplace, according to a CBO estimate. When insurers set premiums for next year, they are required to look at everyone who enrolled in plans that meet ACA standards, both on and off the Marketplace.
The enrollment number wasn't a surprise by the time it dropped — that morning, I guessed it would come in at between 7.8 million and 8 million. But it was certainly a surprise compared with a month earlier. I think it's safe to say that on March 1, few people, on the left or the right, had considered that nearly 50 percent of total signups would occur in the last month and a half. That's a rate much higher than we saw in Massachusetts and is, as I recently noted, a stunning testimonial to the American powers of procrastination.
And whatever others might have thought, I certainly didn't expect it to be that high; until relatively late in the month, I thought it would squeak in at around, or even under, 6 million. I was expecting a surge like in December, not the immense tsunami of applications we actually got.
The demographics were also a surprise to me, and a nasty one at that. You may recall that the administration originally forecast that almost 40 percent of exchange signups needed to be young adults in order to keep the insurance pool stable. A pool with too many old and sick people would drive up the price of insurance, perhaps driving more young and sick people out of the pool, leading to a price spiral.
By March, the percentage of young adults in the pool was hovering at around 25 percent. As I wrote back then, to get to the 38.5 percent that the administration was originally targeting, they needed for there to be a huge surge in enrollment — and for that surge to be much, much younger than the previous waves of enrollees.
They certainly got the surge. And the surge was indeed somewhat younger than previous waves … but not nearly sufficient to bring the demographics in line.
A month ago, assuming a much smaller surge than we got, I also assumed that the demographics would stay bad. I assumed that if we did get a big surge, we would also get much better demographics. The one thing I didn't assume was that we'd get a huge influx of enrollees — and that we'd still only be at 28 percent young adults. I'm still at a loss to explain it. Did every early retiree in America cancel their employer-based retirement benefits and jump onto the exchanges?
Jonathan Cohn argues that this is actually great news, because what matters is what insurers expected, not what the administration expected:
But insurance companies didn't expect young people to sign up in proportion to their numbers in the population. They knew participation would be a bit lower and they set premiums accordingly. Only company officials know exactly what they were projecting — that's proprietary information — but one good metric is the signup rate in Massachusetts, in 2007, when that state had open enrollment for its version of the same reforms. According to information provided by Jonathan Gruber, the MIT economist and reform architect, 28.3 percent of Massachusetts enrollees were ages 19 to 34, a comparable age group.
Yes, that's right: The overall age mix for the Affordable Care Act is virtually the same as the age mix was in Massachusetts. More important, it vindicates the predictions of experts like Gruber who said, all along, that young people would be among the last to sign up. "To get to 28 percent overall, there had to be a lot of young people among the late enrollees," says Larry Levitt, senior vice president at the Kaiser Family Foundation. "That also bodes well for who is likely to sign up next year."
But it's worth noting a few caveats to that. The first is that even prior to Romneycare, young adults in Massachusetts were much less likely to be uninsured than they are nationwide — this study shows 21 percent uninsured for those 19 to 26, and 15 percent for those 27 to 33. The figure for the entire U.S. is 27 percent.
