Topics: Obamacare

Obamacare is for your grandma

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Opinion,David Freddoso,Columnists,Obamacare

Last year, Americans were treated to some very, um, innovative marketing techniques as Obamacare's state health insurance exchanges sought younger customers. Who could forget the “Brosurance” ads out of Colorado, featuring 20-something young men doing keg stands? Or the accompanying “Ho-surance” ad from the same campaign, in which a young lady gushes and prays to heaven that she can bed the man standing next to her as easily as she got her free birth control through Obamacare?

Young adults are not stupid, so perhaps it doesn't come as a surprise that this marketing campaign was one of 2013's greatest flops. Colorado's young people, who according to state data make up 45 percent of the state's uninsured, made up just 22 percent of its Obamacare enrollments.

It's part of a trend in all 50 states — nationwide, only 24 percent of enrollees are young adults. Many of the states supposedly doing well with enrollments (Washington, Colorado, and Connecticut, for example) did exceptionally poorly with the young folks.

Unfortunately, that's just the beginning of the bad news.

One of Obamacare's major goals, often sold by its supporters as a prerequisite for its success, is to attract the coveted 18-34 demographic at rates more or less proportional to their share of the uninsured population. Obamacare forbids insurers from adjusting prices based on customers' health risks. It also doesn't let them charge older customers prices that are commensurate with the additional health risks their age brings.

So to make up for these limitations, Obamacare's health insurance exchanges must bring in as many healthy young adults as possible and overcharge them for insurance that was once available to them for much less. The system's viability, we have been told repeatedly, depends on it.

Obamacare's age demographics are right on the nose for children (6 percent) and adults between 35 and 54 (37 percent). But alarmingly, the crucial “young invincibles” are badly underrepresented.

Equally alarming is which group has picked up the slack. Statistically speaking, every single young person missing from Obamacare's rolls has been replaced by someone 55 or older. At 33 percent of enrollment, this group is overrepresented by about 100 percent. This is the most expensive pre-Medicare age demographic, with estimated per capita costs up to five times those of young adults. Only three states and Washington, D.C., where all congressional staffers are required to enroll, even managed to sign up one young person for every old person. Ideally, the ratio should be two-to-one.

In short, Obamacare is for grandma. The elderly are packing into the exchange plans as though they've found the last train to Medicare. It's not a good sign for the insurers — nor for the customers who will face higher rates next year if health costs exceed expectations.

Of course, the health of the enrollees is more important than their age. If the young who have signed up are exceptionally ill, things could be worse than they appear. We still know little about that, since health questions cannot be asked on the applications. But an ongoing Reuters-Ipsos survey suggests that as of Dec. 31, Obamacare enrollees are 46 percent more likely than the average uninsured person to have chronic conditions and 67 percent more likely to have a disability requiring care.

This may mean higher premiums in 2015 that make insurance even less attractive for the young. It might mean insurer losses and taxpayer-funded bailouts, as provided for within the Obamacare law. For these reasons and others, this Obamacare story isn't going away any time soon.

DAVID FREDDOSO, a Washington Examiner columnist, is the former Editorial Page Editor for the Examiner and the New York Times-bestselling author of "Spin Masters: How the Media Ignored the Real News and Helped Re-elect Barack Obama." He has also written two other books, "The Case Against Barack Obama" (2008) and "Gangster Government" (2011).

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