It's been said that the most important demographic group for the success of Obamacare is the "young invincibles" -- healthy young adults.
And there's no state with a smaller proportion of young people buying health insurance through the Obamacare exchange than Arizona.
The thought is that a large number of young people need to enroll in Obamacare to balance the market, as young people pay premiums that total more than their expenses, while older people will be paying premiums that don't fully cover their expenses.
The Department of Health and Human Services says enrollment of young adults is important "to help to ensure a favorable risk mix."
Here's what the Kaiser Family Foundation said in a recent analysis on the issue:
Because young adults will be cross-subsidizing older adults, they need to enroll in sufficient numbers for that cross subsidy to be sufficient. In other words, if 7 million people enroll in the new health insurance marketplaces -- which is what the Congressional Budget Office has projected -- then 40 percent of them (or 2.8 million) would need to be young adults (assuming a similar proportion enrolled in ACA-compliant plans outside of the marketplaces as well). If 5 million people enroll, then the target for young adults would be 2 million.
If enrollment among young adults falls short, then the total amount of premiums collected by insurers will be less than the total health care expenses of enrollees plus administrative overhead and profit. And, if insurers believe that those enrollment patterns will continue into 2015, then they may raise premiums higher to compensate for the loss.
However, because premiums are still allowed to vary substantially based on age, the financial consequences of lower enrollment among young adults are not as great as conventional wisdom might suggest.
The Kaiser Family Foundation analysts certainly agree that a smaller share of young and healthy people in the marketplace would make premiums go up, "However, premiums are not as sensitive to the mix of enrollment as fears about a 'death spiral' suggest . . ."
That said, those young people just aren't signing up in Arizona at this point, as indicated in the HHS enrollment statistics released Monday.
The Obama administration's goal was 40 percent of enrollees between ages 18 and 35.
According to the stats released Monday, only about 24 percent of enrollees are in that age group. In Arizona, it's just 17 percent -- the lowest proportion in the nation, tied with West Virginia.
On the flip side, the rest of enrollees aren't just old people. Arizona has an unusually high proportion of children (under age 18) getting insured.
Although it's been estimated that only 6 percent of the people who get covered under the Affordable Care Act exchange would be under 18. That proportion is 15 percent in Arizona, one of the highest rates in the nation.
The total number of Arizonans who have picked a healthcare plan through the exchange is nearly 28,000. Another 40,000-plus who applied were determined to be eligible for Medicaid or the Children's Health Insurance Program.
Click here to see all the enrollment statistics released by HHS yesterday.
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