Filed Under:Health Insurance, Individual Health

Exchanges fight to attract young, healthy

Cinthia Orozco signs up for exchange coverage at a health fair in Sacramento, Calif. (AP photo/Rich Pedroncelli)
Cinthia Orozco signs up for exchange coverage at a health fair in Sacramento, Calif. (AP photo/Rich Pedroncelli)

LOS ANGELES (AP) — Early health insurance exchange enrollment has been lower than the Obama administration predicted, and officials in some states say those who have managed to sign up have generally been older people with medical problems.

Consumers have until Dec. 15 to sign up if they want to be covered on Jan. 1.

Young, healthy people may be more inclined to procrastinate, especially given the reports about problems with the HealthCare.gov enrollment system.

But, if these trends persist, exchanges could have trouble attracting the young, healthy people they need to make exchange plans financially viable.

Insurers have warned that they need a wide range of people signing up for coverage because premiums paid by adults in the younger and healthier group, between 18 and 35, are needed to offset the cost of carrying older and sicker customers who typically generate far more in medical bills than they contribute in premiums.

In California, the state with the largest uninsured population, most of those who applied were older people with health problems, according to a state health care official.

In Kentucky, nearly 3 of 4 enrollees were over 35.

In Ohio, groups helping with enrollment described many of those coming to them as older residents who lost their jobs and health coverage during the recession.

"They have been putting off treatment for a long time, just praying they live until they turn 65 and qualify for Medicare," said Lisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks, which received federal grant money to help people establish coverage.

That people with serious health conditions would be the first to take advantage of the Patient Protection and Affordable Care Act (PPACA) was expected. But exchange managers are hoping that direction will shift.

In general, someone in his 60s uses $6 in health care services for every $1 tallied by someone in his 20s, said Nicole Kasabian Evans of the California Association of Health Plans. That makes younger adults a coveted group on industry balance sheets.

If those signing up trend to the elderly and sickly "your insurance is going to cost more and that will discourage those younger people from coming in," warned Lisa Folberg, a vice president with the California Medical Association. Faced with steep prices, younger people could opt to pay a government fine rather than purchase coverage.

Efforts to attract adults younger than 35, often referred to as "young invincibles," include multimillion dollar advertising campaigns, which have launched in several states.

In California, Peter Lee, director of the state-run health exchange, said his state's outreach effort taps social media, radio and TV ads, and events at churches, community centers and other venues. To emphasize the point, Covered California included a 27-year-old man who had signed up for coverage during its news conference earlier this week. Such an approach aims to counter the current trend in the state. Lee described October enrollees in California as "older people or people who have health conditions."

"These are people that have been waiting a long time to get covered," he said.

In Colorado, an aggressive campaign from allies of the state-run exchange includes provocative ads. One targeting women combines the promise of free birth control pills with the notion of casual sex. Another ad shows women with a contraption made of alcohol shot glasses glued to an old snow ski. "Saving money on flu shots leaves us more money for fun shots," the ad reads. The day the health exchange launched, male and female models wearing nothing but underwear and "Get Covered" signs passed out fliers on a downtown Denver street.

It's not clear whether the campaign is working. Colorado's exchange has yet to release a demographic breakdown of the 3,700 people who selected an individual policy last month.

"We are making an extra push to reach young adults, and we do expect they're going to take a lot of encouraging because they tend to wait until the last minute," said Myung Kim, spokeswoman for Colorado's exchange.

If such efforts fail and insurance companies end up with too many sick or expensive customers, they might need to increase premiums or eventually leave markets to avoid taking heavy financial losses.

"It's going to be very messy for the next couple of years, until we figure out who is buying insurance," said Glenn Melnick, director of the Center for Health Financing, Policy and Management at the University of Southern California. "There are a lot of pieces of this that are just black boxes right now."

Aetna Chairman and chief executive Mark Bertolini said last month that it was "incredibly important" to get the exchange websites running properly because "the younger, healthier people aren't going to give them more than one shot."

Associated Press writers Roger Alford in Frankfort, Ky., Carla K. Johnson in Chicago, Tom Murphy in Indianapolis, Ann Sanner in Columbus, Ohio, Juliet Williams in Sacramento, Calif., and Kristen Wyatt in Denver contributed to this report.

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