As the Affordable Care Act enters its third year (open enrollment is now underway), I’m starting to have serious doubts about the program’s long-term viability.
Since the ACA’s launch, about 17.6 million more people have acquired health insurance, and that’s a good thing. But for all the hoopla, the program has failed to attract a sufficient number of young Americans, the one demographic needed to make the whole thing work.
During a conference call with reporters last month, Health and Human Services Secretary Sylvia Burwell painted what, for me, was a troubling picture: Of the 10.5 million people currently uninsured and ACA eligible, she said, her agency is predicting a net gain of only 1 million for all of next year.
In other words, nine out of every 10 people who are currently uninsured and ACA eligible will still be uninsured when 2016 draws to a close.
This is not a good thing, and here’s why.
Those who aren’t signing up under ACA tend to be young and healthy, the very people ACA needs to keep premiums low for older folks who tend to file more medical claims. In fact, about half of that 10.5 million people fall into the age range of 18 to 34 – the “young invincibles,” Burwell called them.
Without those young people paying into the system each month (and taking little from it), we already are seeing ACA premiums spike. Last month, the N.C. Department of Insurance announced that ACA premiums in the state would increase by as much as 50 percent for some plans starting January 1.
With annual hikes like that, how long will it be before ACA users who are living on the margins find themselves unable to pay the monthly premiums that rise with each new calendar year? And if families start letting their policies lapse for non-payment, the result could be disastrous — those who remain would face even larger increases until they, too, could no longer afford their policies and let them expire. The result would be a classic death spiral for ACA.
Burwell and others in the administration aren’t predicting anything like that, of course. But even they acknowledge that winning over these “young invincibles” will surely take longer than anyone anticipated.
Here’s why.
According to the fed’s own data, the 10.5 million ACA-eligible people who remain uninsured aren’t exactly swimming in cash.
• Almost 40 percent are living at 139 percent to 250 percent of the poverty level. (That about $30,000 to $60,000 for a family of four.)
• Nearly 8 in 10 have less than $1,000 in savings.
• About half have less than $100 in savings.
Even as the tax penalty goes up for the stubbornly uninsured (in 2016 it rises to 2.5 percent of household income or a maximum of $2,085 per family, whichever is higher), no one is expecting a rush of young people seeking coverage.
Still, Burwell and others in government insist that ACA has not plateaued.
In an effort to reach more of the uninsured, HHS officials said the agency will contract with more “navigators” and “assistants” to offer in-person help during the current enrollment season. They’ll also place more ads in key cities, where they’ll stress the availability of ACA tax credits for those who qualify.
I hope it all works out, but knowing what I know about the nature of “young invincibles,” I’m not at all convinced that it will. At a time when incomes are stagnant and personal wealth has fallen, it’s hard to make a case that young people will be willing to place health insurance on par with food, shelter and clothing.
STUBBORNLY UNINSURED
Nearly two years after the launch of the Affordable Care Act, about 10.5 million Americans eligible for the ACA marketplace are still without health insurance, according to Health and Human Services. Almost 8 in 10 have incomes that qualify them for financial assistance.
Here are some facts about those uninsured:
• More than 33 percent are people of color.
• 19 percent are Hispanic.
• 14 percent African American
• 2 percent Asian.
• 57 percent are males.
• 60 percent are said to be confused about how the premium tax credits work or they don’t know the credits are available.
For more information about the Affordable Care Act, visit the government’s website.
