01/13/2014 04:12 pm ET Updated Jan 23, 2014

Obamacare Isn't Attracting Enough Young, Healthy Americans

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WASHINGTON, Jan 13 (Reuters) - The new private health plans available under Obamacare drew in fewer young and healthy Americans than needed for the administration to make healthcare reform a market success in the first wave of enrollment, an official report showed on Monday.

Twenty-four percent of the 2.2 million people who signed up for private coverage between Oct. 1 and Dec. 28 belonged to a target audience of 18- to 34-year-olds, according to an administration report, the first to provide a demographic breakdown on enrollment in the new plans offered under President Barack Obama's healthcare law.

That compares with a target closer to 38 percent set before the program's botched Oct. 1 rollout, when administration officials believed that about 2.7 million of a forecast 7 million potential enrollees for 2014 would be between 18 and 35 to help offset the cost of covering sicker consumers.

Health policy experts say the administration may still get closer to that ratio by the time 2014 enrollment closes at the end of March, when more young Americans sign up to avoid the law's penalty for not being insured.

Administration officials pointed to Monday's data as an encouraging start, particularly given the technology failures that stalled access to the federal enrollment website in October and November.

A failure to improve on the numbers means insurers would need to raise prices next year, strengthening the position of Republican opponents who say Obamacare is not financially sustainable.

"These enrollment figures are encouraging for this stage in the process, especially with all the early systems problems they experienced," said Larry Leavitt of the nonpartisan Kaiser Family Foundation. "We're at half-time in the open enrollment period, and I would expect larger numbers of young people to enroll in the second half."

Senior administration officials said that younger adult enrollment surged eight-fold in December when was working relatively smoothly for the 36 states it serves. They expect the number to grow strongly in the remaining three months as the government ramps up its public outreach campaign.

"The numbers show that there is a very strong national demand for affordable healthcare made possible by the Affordable Care Act," said U.S. Health and Human Services Secretary Kathleen Sebelius.

More than 9 million people have now gained coverage under the Patient Protection and Affordable Care Act, administration officials estimate.

In addition to the private insurance plans, nearly 4 million people have qualified for the Medicaid program for the poor, while 3 million people in their early 20s are now allowed to remain on their parents' plans.

The data showed that more women than men (54 versus 46 percent) have signed up for health coverage under Obamacare, while about 80 percent of all enrollees received federal assistance to defray the cost of coverage. The majority opted for so-called "silver" plans, which are the second least-expensive category and provide moderate coverage.

"We are confident, based on the results we have now, that we'll have an appropriate mix of individuals enrolled in coverage," said Mike Hash, health reform director at the U.S. Department of Health and Human Services.

A recent report from the Kaiser Family Foundation said having younger adults make up only 25 percent of enrollees would present a "worst case" scenario. They found that costs then would be about 2.4 percent higher, but insurers would retain a very slim profit margin.

As a result, the Kaiser authors projected the companies would raise premiums by a commensurate amount, but not enough to destabilize the market. (Reporting by David Morgan; Editing by Michele Gershberg and Sandra Maler)



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