Young people gave Obamacare an early Christmas present Tuesday.
The Obama administration said about 8.2 million have signed up for Obamacare through the federal-run healthcare.gov, which is used by 38 states. Nestled in the signup data is a key finding that more people under 35 are signing up this open enrollment season than last time.
About 2.1 million people under 35 have enrolled, compared with 1.1 million in last year’s open enrollment.
Adults under 35 composed about 35 percent of healthcare.gov consumers as of the deadline to get coverage by Jan. 1. That is slightly more than the 33 percent before the deadline for last open enrollment in 2014.
The additional signups from younger people can help ease premiums and out-of-pocket costs for enrollees, one Obamacare activist said.
“A key problem amongst some plans is that they have a larger portion of older and less healthy people,” said Ron Pollack, executive director of the pro-Obamacare advocacy group Families USA. “That, of course, has significant impacts on premiums and out-of-pocket costs that are charged.”
It is not clear if the influx of youth will help the Obamacare marketplaces.
UnitedHealth, America’s largest insurer, sent shockwaves on Wall Street and Capitol Hill last month when it said it might exit them.
The reason part was “growth expectations for individual exchange participation have tempered industrywide,” according to the insurer. Another reason was market data signaled higher risks.
Higher risks also have been a problem for about 12 out of 23 taxpayer-funded cooperatives that closed down earlier this year. The co-ops were hoping for additional money to cover higher-than-expected claims, but the government was not able to provide it due to constraints from Congress.
So far UnitedHealth hasn’t made any decision, but the insurer has said it cannot sustain hundreds of millions of dollars in losses to remain in the marketplaces.
Other insurers have remained steadfast that they will remain.
It is not clear what created the unexpected surge in young people signing up for Obamacare. Part of the reason may be the “stick” in Obamacare’s effort to get people to sign up for insurance.
Pollack said it may make financial sense for younger people to sign up for Obamacare, as they will probably earn enough to get a subsidy.
“The comparison between what they would pay for a penalty and what they would pay [after] a substantial tax credit subsidy will find that it makes good sense from a value perspective to buy insurance,” he said.
