The premise of the Affordable Care Act is really pretty simple. Lots and lots of people pool their money (by paying health insurance premiums), and when a few of those people get sick, their medical care will be paid for out of that pool.
Put in those terms, it’s not hard to see where it would break down — if not enough people paid in, or too many people required too much care.
That’s why the demographics of the ACA are important. America has plenty of older and sick people who need care. For the ACA system to work, therefore, we need even more young and healthy people to contribute — to pay into the pool.
But it’s not happening. And that means trouble for the ACA.
Last week, the president announced that 8 million people have signed up for insurance through the ACA’s exchanges. And President Obama added that 35 percent of the new enrollees are under the age of 35.
That’s an important enough claim for all the networks to highlight it. But it’s also misleading.
“The ‘young invincibles’ are considered a key to the health law’s success, since they are healthier and won’t require as much health care as older Americans,” notes the Washington Post’s Fact Checker column. “If the proportion of young and old enrollees was out of whack, insurance companies might feel compelled to boost premiums, which some analysts feared would lead to a cycle of even fewer younger adults and higher premiums. (There is also a dissenting viewpoint about the importance of this figure.) But some readers cried foul, saying the president highlighted a misleading number in his news conference. The young invincibles are between the ages of 18 and 34 — and as White House ‘fact sheet’ acknowledged, that figure is 28 percent. The 35 percent figures includes children under the age of 18.”
In fact, the administration previously said that the number of “young invincibles” it needs is somewhere around 40 percent.
Adding in children — who tend to be a cost to the system rather than a contribution to the bottom line — is simply fudging the numbers. And many reporters fell for it.
“The Kaiser Family Foundation in 2013 estimated that more than a third of the enrollments should be between 18 and 34 years old for these types of plans to succeed,” reported Ari Melber for MSNBC. “Again today, the president was able to announce, 35 percent of enrollees are under 35.”
And ABC missed the point even more.
“Eight million people have now signed up for Obamacare,” reported Amy Robach. “That’s 1 million more than projected. And 35 percent of the new enrollees are under age 35, and that’s just shy of the administration’s goal of 40 percent.”
See how this works?
There’s another factor at work here. The ACA also forces insurance firms to cover “children” up to the age of 26 on their parents’ policies. That’s popular, but also detracts from the real number of young people buying their own plans.
The numbers aren’t adding up. That’s a problem.