After months of ludicrous B.S. about how they didn’t have a demographic breakdown of ObamaCare purchases – have you ever heard of an insurance policy that didn’t ask how old you are, or whether you have any pre-existing conditions? – the Department of Health and Human Services finally released a report. As with everything related to ObamaCare, it should be taken with a grain of salt – we’ve been lied to so often that it would be foolish to accept anything the Administration says.
Right off the bat, I notice they’re still pretending they don’t know how many people have paid for their policies and secured valid coverage. You don’t suppose younger insurance customers have a high propensity for “selecting” a plan but failing to follow through with that first payment, do you? Do you think the young people who did pay will be exceptionally likely to stop paying when they discover they’re shelling out big bucks for functionally useless policies that don’t help them until they’ve covered eight, ten, or twelve thousand dollars in out-of-pocket costs?
But even setting these skeptical thoughts aside, the demographic mix is not good. Fox News reports:
Insurers have raised concerns that too few young people are signing up for heath insurance through the ObamaCare exchanges after newly released statistics showed that less than a quarter of people who have enrolled are between the ages of 18 and 34.
According to the numbers released Monday by the U.S. Department of Health and Human Services, only 24 percent – or 489,460 – of the 2.2 million people who signed up for ACA were in the coveted 18-to-34 age range. That means the government has hit only 18 percent of its stated goal of registering 2.7 million adults in the 18-to-34 age range.
Experts have predicted that the program will need roughly 40 percent of enrollees to be in that prime demographic in order to be fiscally solvent. Adults ages 55 to 64 made up 33 percent of the total number of Americans who signed up, the largest group represented in the data.
Yeah, that 2.2 million number is phony as a three-dollar bill, so I suspect the actual mix – based on the number of valid, paid policies – is even worse. 24 percent is disastrous, so naturally HHS Secretary Kathleen Sebelius bounced to the podium to declare it a smashing success, no matter what those silly insurance executives say. From the New York Times:
But administration officials expressed optimism that more young people would sign up in the months ahead, calling the latest enrollment numbers “solid, solid news” for the health care law. They said that interest in obtaining insurance through the marketplaces was increasing sharply across all age groups and that youth outreach efforts would become more aggressive as the March 31 open enrollment deadline approached.
“We’re pleased to see such a strong response and heavy demand,” said Kathleen Sebelius, the secretary of health and human services. “Among young adults, the momentum was particularly strong.”
Yes, there’s heavy demand from all those young adults who aren’t signing up for ObamaCare. And the website has worked acceptably since Day One. Okay, maybe there were a few bumps and glitches, but that was all due to the incredibly heavy demand from the mega-popular Healthcare.gov, which couldn’t get more traffic if it was running nude photos of Kate Upton juggling baby kittens in zero gravity. If you like your insurance plan, you can keep your plan. If you like your doctor, you can keep your doctor.
On and on the blizzard of bovine excrement spins, as it becomes increasingly clear why Sebelius and her minions have been throwing themselves on top of hard data as though it were a live grenade. Imagine how bad the public response to ObamaCare would have been if they knew how dismally it was performing in real-time, rather than finding out months later.
Back in the real world, Avik Roy at Forbes quotes analysts from the Kaiser Family Foundation calling youth enrollment of 25 percent or less “a worst-case scenario” that would devour the bulk of the insurance industry’s profits, thanks to the excessive cost of covering older, sicker consumers. Contrary to popular mythology (spread by the people who couldn’t wait to seize control of health insurance and ruin it), insurance companies run on fairly thin profit margins of only 4 to 6 percent, so they can’t afford to lose 2.4 percent to cost overruns. Hello, taxpayer bailout!
Another shoe I haven’t heard drop yet is the portion of young ObamaCare buyers who aren’t healthy. It stands to reason that people with pre-existing conditions would be particularly interested in fighting their way through the Healthcare.gov bug swarms to buy policies… but only young and healthy customers generate the desired income stream for insurance companies. Well, let’s be brutally honest: only young and healthy customers open the desired pipeline from taxpayers to insurance company coffers, since those premiums are heavily subsidized. An amusing fact dropped in the Fox News report is that “79 percent of ObamaCare customers selected a plan with financial assistance,” meaning that people who actually have to pay their own freight ran screaming at the sight of those premiums. As we keep hearing from disillusioned Obama voters, this whole scheme starts looking a lot less appealing when you discover your paycheck will be strip-mined to pay for it.
Avik Roy refines the question about the mix of healthy and sick ObamaCare customers to wonder if the healthy customers are buying the cheaper “bronze” plans, which would further compromise the income stream insurance companies were anticipating. While he begins his analysis by speculating that “we may not get as far as a true ‘death spiral,’” he concludes by noting that “many Americans will choose to go without insurance because it’s even less affordable than before.” That is the death spiral – a bit more gradual than the instantaneous financial collapse of insurance companies in 2014, but if the result of adverse selection is even higher insurance premiums, adverse selection will grow worse. People don’t like ObamaCare now; they’ll find it even less appealing when it costs more.
If the political speculation of industry expert Robert Laszewski proves true, and ObamaCare’s notorious individual mandate is erased due to public outrage, as the initially modest trans-Constitutional tax/penalty packs on a few billion dollars of muscle and pops its claws, the adverse selection death spiral will go completely off the rails. ObamaCare’s bitter reality is that more people are uninsured now, but they have to pay a special tax for the privilege of not buying lousy policies. Take away the tax – take away the gun held to their heads – and the Young Invincibles will be even less willing to open their wallets.
There’s an incredibly offensive air of casual disdain for the details hanging over every aspect of ObamaCare. The latest faceplant comes with the launch of the Spanish-language version of HealthCare.gov, which was delayed for over two months, carries a fresh infestation of bugs… and was evidently written by someone who doesn’t actually speak Spanish, leading critics to suspect someone dashed off the text in English and ran it through a crude translator program. That’s what you get when you only give Team Obama the better part of a billion dollars to design a website, I guess. But what’s going to happen to that ObamaCare death spiral if Spanish-speaking customers – initially among the strongest supporters of the program – are turned off by their misbegotten afterthought of a website?
There was no oversight for the website construction, no planning to deal with adverse selection issues – White House advisers cheerfully admitted there was no “Plan B” when asked about this in December – and no advance plans to handle the wave of insurance cancellations Obama knew was coming when he told his Big Lie, over and over again. It’s all being made up on the fly, with the legal requirements of the Affordable Care Act disregarded as necessary. It seems like nobody in the Administration thought seriously about anything except making sure the government funding for ObamaCare was secure, making it difficult to defund or repeal. It’s a virus that cares little for the health of its host organism. But the death spiral is a financial reality nobody can spin away.