There is no mystery as to why the Obama administration has been dragging its feet on Obamacare enrollment numbers. The Post reports, “Young adults account for slightly less than one-fourth of the Americans who signed up for health plans during the initial three months of federal and state insurance marketplaces — fewer so far than the government has said will be needed to make the economics of the new exchanges work.” This isn’t going to be enough:
According to the report, released by Health and Human Services Secretary Kathleen Sebelius, 24 percent of the nearly 2.2 million people who enrolled in the marketplaces through the end of December are between the ages of 18 and 34. One-third are 55 to 64 years old.
The figures mean that the proportion of young adults is lagging behind what both government and outside health-policy analysts have said will be required for the exchanges to remain stable. Analyses have concluded that, to prevent health plans’ premiums from rising and some insurers from potentially dropping out, roughly two in five Americans in the plans should be young adults.
This sure isn’t what the administration had in mind. Don Stewart, deputy chief of staff for minority leader Sen. Mitch McConnell (R-Ky.), said to me, “No group has been hit as hard by the Obama economy and Obamacare as America’s young people. After seeing massive premium increases, and failed bureaucracy in the Obama administration, it’s no wonder they are staying away.”
Meanwhile, Brendan Buck of the speaker’s press office sent out a practically gleeful mass e-mail, “There’s no way to spin it: youth enrollment has been a bust so far. When they see that Obamacare offers high costs for limited access to doctors — if the enrollment goes through at all — it’s no surprise that young people aren’t rushing to sign.” He pointed out that only “489,460 18- to 34-year-olds have enrolled. That means halfway through the enrollment period, enrollments are only 18 percent of the way toward the goal” for 18- to 34-year-olds. Of course, with the program changing constantly and new exemptions being handed out, few people who haven’t already signed up are likely to do so. And given that, is the administration really going to enforce the individual mandate?
Republican critics of Obamacare have argued all along that the problem is not simply a malfunctioning Web site; they correctly anticipated that the government would be unsuccessful in luring enough young, healthy people into the exchanges to buy insurance they don’t want or can’t afford.
This latest finding could well send the exchanges into the so-called death spiral, the mix of participants driving insurers’ costs sky high. That is why they are beginning the drumbeat for a big, fat taxpayer subsidy. This, however, is a political nightmare. Would the White House and Senate Democrats want to give billions to insurance companies? Republicans already are pouncing. Sen. Marco Rubio (R-Fla.) put out a statement Monday that read, in part: “These enrollment numbers show that neither enough total people nor enough young people are signing up for ObamaCare, and it’s increasing the risk to taxpayers of bailing out health insurance companies. Congress should take the bailout option off the table right away by approving a bill I’ve introduced repealing this part of ObamaCare.” Expect other Republicans and even some Democrats to follow suit.
So how’s Obamacare working out? Not well. The insurers can try getting money from the government through other means. As Megan McArdle puts it:
The optics of funneling money to the insurers through these programs is absolutely terrible. And now they are asking the administration for more money — the insurers want the extra expenses that the exchange debacle has imposed excluded from calculating their “medical loss ratio” requirements, which mandate that at least 80 percent of their expenses go toward treatment, not administrative overhead. I think the requirements are pretty silly, as a policy, but they are extremely popular. Asking the administration for a break on this is almost begging members of both parties to beat the snot out of them. White House attempts to explain that it isn’t a bailout will be complicated by the fact that it obviously kind of is.
This debacle highlights one other aspect of Obamacare: It is one big sop to insurance companies, a populist nightmare if the Republicans can make the case. It is also a powerful case for repealing the whole thing and starting over. Obamacare has disrupted the functioning parts of the health-care system and provoked millions of people to lose their insurance and presented people with the reality that they may lose their doctors and their insurance plans. We will be paying (with insurance company bailouts) even more money to cover fewer and fewer people. What Democrat is going to run on this mess in 2014?