The Affordable Care Act (Obamacare) at 3% of overall goal

Only about 49,100 people have enrolled in Obamacare plans so far since they became available on the beleaguered HealthCare.gov website. That number represents about 10% of the 500,000 people who were expected to sign up within the month of October. Technology problems and design flaws have prevented many individuals from signing up and those with the most need have reported trying unsuccessfully every day since its launch on October 1 when a grand total of 6 people signed up. While the website is culpable for some of the poor enrollment, the problems seem to be in the hardwiring of the plan. It was estimated that 7M people nation wide were expected to gain coverage by the end of March when the open enrollment plan is scheduled to end, yet only 700,000 people have completed applications so far, with the number successfully enrolling in coverage a fraction of that population.

Not only are fewer people signing up overall, but the average age of an enrollee is much older than was expected, which is equally concerning. The government needs the average age of an enrollee to be about 40, but preliminary data indicates it is closer to 55. The Affordable Care Act needs young healthy people who will pay for insurance, but are unlikely to need health care services to subsidize the costs of older adults and others who are likely to need more frequent and more costly services.

The young healthy people are most likely to fall in the 18-26 age group, which is the lowest user of health care services. For perspective, a 64 year old is expected to use more than six times the services of a 19 year old. The services of an older adult are also typically more expensive than those of a young healthy person. The young and healthy are the least costly to cover and therefore the most profitable, yet these individuals are still facing disproportionately high ObamaCare rates. As an example, a 27-year-old male will pay 99% higher premiums under The ACA than he would under previously prevailing market rates, should he opt for the lowest coverage.

Keep in mind, this under 26 demographic also had an unemployment rate of 12.5% reported last month compared to the 7.3% national average, 5.4% for those over 55, and 5.9% for those 35-55. This complicates the additional high cost of coverage under the Affordable Care Act as these individuals have high premiums despite being less likely to have a job that provides insurance or a source of income. As a result, many of this population are signing up for Medicaid instead of Obamacare. They may also make the rational choice of paying a small fine to forego health coverage until they can find jobs that provide health insurance.

If this trend continues and young healthy people refuse to sign up for the ACA, the program is in serious trouble. While all the numbers indicate an atrocious start for the program, the start is inconsequential if the program meets its goals in the end. Optimistically, the results from the states developing their own exchanges are marginally better. This is likely attributed to their smaller stature, which allows flexibility and their proximity to the customers, which makes them more accountable than the federal government. Also, keep in perspective that young people are likely to wait to the last minute to sign up, or only sign up for coverage once they are in need of it. Even with such a terrible start, there is still hope of the Affordable Care Act.  

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