We've written regularly about the demographics that could either sustain or torpedo the entire Obamacare project. The administration's own projections have concluded that in order for the program to remain viable, seven million Americans will need to obtain their 2014 health insurance through the exchanges, and the composition of that consumer pool matters greatly. Roughly 2.3 million within that group must be young and healthy enrollees -- many of whom will overpay for coverage to offset other costs. The White House is already inching away from the seven million figure, and a poll released yesterday suggests that very few uninsured Americans have even attempted to sign up through Obamacare. Only a fraction of that fraction has actually succeeded. Here's what I wrote this morning:
The people who were mostly likely to slog through the much-publicized Healthcare.gov quagmire are those with the biggest incentives to do so: Sicker, older folks with pre-existing conditions -- to say nothing of the legions of new Medicaid recipients. If this imbalance doesn't turn around in a hurry, the financial health of the law will be in grave danger.
The Wall Street Journal reports that many observers' educated guesses aren't just rooted in common sense, they're playing out in reality:
If the trend continues, an older, more expensive set of customers could drive up prices for everyone, the insurers say, by forcing them to spread their costs around. “We need a broad range of people to make this work, and we’re not seeing that right now,” said Heather Thiltgen of Medical Mutual of Ohio, the state’s largest insurer by individual customers. “We’re seeing the population skewing older.” The early numbers, described to The Wall Street Journal by insurance executives, agents, state officials and actuaries, are still small—partly a consequence of the continuing technical problems plaguing the federally run exchanges, experts say. HealthCare.gov, the federally run marketplace serving 36 states, is suffering serious technical problems that have prevented many people from signing up. But the numbers demonstrate a real-world fallout from the digital snafus: Less-healthy customers are more likely to persevere through technical obstacles to gain coverage, insurers say. Younger, healthier customers who feel less need for insurance—but whose widespread participation is important to the financial success of the system—could be quicker to give up.
Convincing so-called 'young invincibles' to sign up for Obamacare -- especially to shoulder an unfair share of the cost burden -- was going to be a challenge in itself. Expecting millennials to overlook the ubiquitous mockery of an embarrassingly broken website and doggedly forge ahead in this cost-increasing endeavor is simply delusional. Plus, don't overlook Obamacare's Medicaid enrollment disproportionality problem; between the Medicaid numbers and the trend described by the Journal above, the vast majority of the newly-enrolled will place financial strains on the system. For Obamacare to survive, it will need a counterweight of millions of people paying beaucoup dollars into the pot. So far, that's not happening. Hello, adverse selection spiral. In spite of an unexpected Healthcare.gov outage yesterday, CMS is still sticking to its new deadline of November 30 to have the whole site running smoothly. If they achieve that goal, consumers will have two weeks to meet the December 15th deadline to enroll in coverage that starts on January 1, 2014. If they don't, and there is ample cause for intense skepticism, what's the back-up plan? Basically, there's still time (and enrollment periods sometimes get off to slow starts), but the clock is very much ticking. And as if high costs and malfunctioning websites weren't enough to turn off the young, how might the threat of identity theft factor in to potential consumers' decision-making process? Dan outlined CBS News' damning data security report earlier. Here's the accompanying clip:
"Software experts tell CBS News they've identified multiple security issues...within seconds, he identified the specific security question she used to reset her password."
The comprehensiveness of this fiasco is stunning.