Cover Story: Obamacare: This Might Hurt a Little

An examination of what the Affordable Care Act means to your business

Angel Abcede, Senior Editor/Tobacco, CSP

Melissa Vonder Haar, Freelance Writer

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Shying away from that number is understandable. As of late February, about 2 million more people would have needed to sign up in order to be deemed “a success.” Part of the slow reception can be attributed to the disastrous rollout of’s online system, which experienced multiple crashes and frustratingly long wait times in its first months.

Beyond the potential failure to hit the broader goal of 6 million to 7 million (the final figure had not been reported as of press time, though by early March signups were said to be above 4.3 million) is the deeper concern about who has signed up. For the system to work properly, it’s crucial that a decent percentage of younger, healthier individuals are enrolled and enrollees are actually paying their premiums.

The age ratios are at best concerning, and at worst disastrous.

According to U.S. Department of Health and Human Services (HHS) data, only 24% of Americans who enrolled in ACA plans during first three months of enrollment were in the coveted 18-to- 34 age bracket; by comparison, 55% of enrollees during that time were 45 to 64, an age bracket just shy of Medicare eligibility and significantly more risky.

Knowing the 18-to-34 bracket would be more difficult to attract, both because of generally better health and feelings of invincibility, ACA ads targeting this set flooded the market in 2014. That led to a 65% increase in January signups, but healthy, younger individuals still only accounted for roughly 25% of the 4 million ACA enrollees.

As troubling as the age gap may seem, measures such as risk corridors, reinsurance and risk-adjustment programs have been built into the law to ensure that—at least in the early years—healthy individuals are not paying increased premiums to cover the high cost of older or sicker enrollees.

No, analysts say the more important metric in the early success of the ACA is one that is not yet measurable. In a February interview with USA Today, Washington and Lee University law professor and health policy expert Tim Jost suggested that the true impact healthcare reform will have on insurers will be known only once officials have a better idea if new policyholders are actually paying for their insurance plans.

“If nobody shows up, that will have serious consequences in the risk pools,” said Jost.

To date, the HHS has data only on how many people have enrolled, not how many have paid. Jost believes that 2015’s premium rates will provide a better picture of how well the ACA is working.

“Are there insurers who drop out of the exchange because they can’t make a go of it?” he said. “Or do insurers jump in if things look pretty good?”

Up Next: Repeal? Replace? What's realistic?


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