After a few earlier reports suggesting its enrollment pool skews a bit old, Kentucky released its 2013 enrollment statistics as of a few days before the final final final sign-up deadline to have insurance by New Year’s.
Democratic Gov. Steve Beshear’s website boasts that 40 percent of enrollees are in the 18-35 year old demographic — and it does its best to report ages so as to make it impossible to separate out the Medicaid age-ranges from the private health plans. So I’ve gone through the document and lined up all the columns and added it all up.
Here’s what you get: Just over 26,000 enrollees in private Obamacare plans, with an age breakdown that looks like this:
You’ll notice that’s a lot less than 40 percent young adults. It’s actually about half. (In case you’re wondering, the small black sliver at noon is the 0.33 percent of enrollees over age 65, who for cost-estimating purposes can probably be counted along with the rest of the over-55 crowd.)
Nationwide, the hope has always been to have 2.7 million out of 7 million from the young adult age group, 18 to 35 years old — about 38 percent. Kaiser estimated that 40 percent of the market is young adults, and suggested that the expected pool in the average private plan should look something like the pie chart below:
This should vary a bit from state to state, based on the composition of the state’s uninsured population. But in Kentucky’s pool, it’s not a small variation. There are half as many young adults as expected and twice as many from the “waiting-for-Medicare” crowd. In fact, those over age 55 are enrolling at more than twice their share of the state’s non-elderly population (15 percent). The young are underrepresented by that measure, and probably even more so when you consider that they are dispropotionately likely to be uninsured.
At both ends, then, this is worse than Kaiser’s worst-case scenario, in which it was assumed that young people would make up only 25 percent of enrollment. In that case, they expected insurers to suffer losses of 2.4 percent.
Some people have cited this Kaiser study and wrongly concluded that it means insurers would have to raise premiums by only 2.4 percent. That’s doesn’t sound so bad, but unfortunately it’s a misreading of the study. In fact, because they aim for a 4 percent profit when they make these calculations, insurers would have to raise next year’s premiums right away by 6.6 percent just to make up for the bad estimation for next year. In addition, Kaiser notes that insurers would likely try to recoup part or all of their 2014 losses (add 2.5 percent) and perhaps try to recoup missed profits as well (add up to 4.1 percent more). And then add on medical inflation projections for private insurers in 2015 (6.2 percent, which implies a 6.4 percent increase from the deficient 2014 premiums).
We can’t know how healthy this pool is. But from what we can know, these enrollment demographics in Kentucky are worse than Kaiser’s “worst case” estimate. So what does that mean? I don’t know, but let’s say there’s a 19 or 20 percent rate hike for 2015 — right after this year’s hikes, which in Kentucky were 67 percent for the average 27 year-old man. That doesn’t necessarily mean “death spiral,” but increases can fall well short of death spiral territory and still create a lot of political pressure for repeal.