Filed Under:Markets, Employee Benefits

"Dude, what's in PPACA for me?"

(AP Photo/Marcio Jose Sanchez)
(AP Photo/Marcio Jose Sanchez)

WellPoint (NYSE:WLP) and competitors have made concerted, well-publicized efforts to sell health coverage to the "Young Invincibles" -- healthy, employed, more or less solvent young people who are not quite sure why they should buy health coverage.

Now the managers of the California Health Benefit Exchange (CHBE) are confronting a similar challenging "market segment" as they set about designing outreach programs for their state's individual and small group exchanges.

Larry Bye, a senior fellow at the National Opinion Research Center (NORC), Chicago, talked about "Calculated Risk Takers" -- uninsured, employed individuals ages 18 to 34 who have incomes over 400 percent of the federal poverty level -- at a recent California exchange board meeting.

The drafters of the Patient and Protection and Affordable Care Act of 2010 (PPACA) have tried to make sure that more young invincibles have health coverage by requiring employers that offer dependent coverage to let workers keep dependents on the coverage up until age 26, at the workers' expense.

In 2014, PPACA will require most employers with more than 50 full-time equivalent workers to provide health coverage starting or else pay a penalty.

Other PPACA provisions will provide free coverage for some young adults with very low incomes, and subsidies that other young adults with incomes under 400 percent of the federal poverty level can use to buy private coverage.

PPACA will impose a small penalty on many uninsured individuals who can afford to buy health coverage and fail to do so, but some observers say the penalty will be so small that many people with incomes over 400 percent of the federal poverty level will continue to be uninsured, or will buy insurance coverage that fails to meet the PPACA minimum coverage requirements.

If large numbers of healthy young adults fail to buy coverage, that could expose them to huge medical bills when they do get sick, and it could deprive health plans of premium revenue from young, generally healthy adults who could help offset the claims that older, sicker enrollees file.

The CHBE has hired NORC to help it analyze the California market.

For the recent marketing presentation, NORC commissioned in-person, one-on-one interviews with 412 California residents who have no health coverage or who have individual health coverage. 

NORC divided the uninsured people it interviewed into segments such as as a "working families" segment, an "at risk and aging" segment, and an "aging and denied" segment.

"Calculated Risk Takers are by far the least likely to purchase a plan compared to other groups," Bye said, according to a written version of his presentation. 

The Calculated Risk Takers are the most likely to say they value saving money as a reason to buy a plan through the new California PPACA "Covered California" exchange program, Bye said.

"They also were substantially more likely than other groups to state that improving health was a reason for acquiring a plan."

About 20 percent of the Calculated Risk Takers told researchers that they had no coverage because they don't need coverage, and 22 percent said one reason they don't have coverage is a lack of necessary information.

None of the Calculated Risk Takers interviewed said PPACA changes would be bad for the health care system, but 55 percent said they were unsure about the effects of PPACA. They were much more likely than the participants in any other surveyed segment to express uncertainty about the effects of PPACA.

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