Gallup released a new poll this week showing that a sizeable portion of an important cohort for Obamacare’s success is planning to pay fine rather than foot the bill for most costly insurance.
The so-called young invincibles – defined by Gallup as Americans under 30 years old – is the group whose purchase of health insurance on Obamacare exchanges is most coveted because they are projected to pay for more services than they use. The money made off their premiums will cover the cost of care for older and sicker people in the risk pool.
But the financial coercion desired by Obamacare’s operators could likely hit a snag this year because the penalty for not buying insurance is only $95, or less than any monthly premium available on an exchange.
Unfortunately for Obamacare’s supporters, Gallup says that 26 percent of young invincibles are planning to pay the fine instead of buy insurance. If enough do so, Obamacare’s cost structure gets up-ended, putting the feds on the hook to cover the overruns. Private insurers will then spike premiums in future years to compensate.
The big question is, “What number is ‘enough’?” No one knows the answer.
That’s because the key number for making the Obamacare exchanges financially workable is a ratio. For Healthcare.gov – the federal exchange – the Congressional Budget Office estimates that 38 percent of the risk pool needs to be young invincibles in order for the system to operate.
That means that the critical number for Healthcare.gov isn’t whether it actually enrolls the 7 million people it originally projected; it’s whether 38 percent of whatever population enrolls is made up of young invincibles, says Ezra Klein.
Early returns aren’t boding well, reports Breitbart News. The Obama administration so far has refused to release a breakdown of federal enrollees by age bracket, but the State of Kentucky has. The Bluegrass State runs its own exchange and only 19 percent of its enrollees are between the ages of 18-34 – a span that includes more years than Gallup’s. If that trend holds throughout the enrollment period that runs through March, Kentucky – and any other exchange with less than 38 percent of young invincibles – could face the dreaded ‘death spiral’ where premium costs soar to cover a sicker population that anticipated.
For now, we’ll have to wait and see whether the Obamacare-affiliated exchanges hit the magic number by the enrollment deadline. My guess is that the lack of transparency is directly related to the failure to meet the goal.