Obamacare Numbers Aren’t Adding Up

The administration has been reluctant to release much information on Obamacare signups, presumably because the information has been viewed as disappointing. Today, however, the administration released the first demographic data on those who have signed up for health insurance on either the federal site, or the various state sites. So far, at least, it doesn’t appear that the program is attracting enough young people, who are presumably healthy, to create a sustainable insured pool:

The Obama administration on Monday announced that less than a quarter of those who have signed up for Obamacare are between 18 and 34 years old, a figure that falls short of the White House’s initial target for ensuring enough younger, healthier Americans enroll in health plans to keep the Affordable Care Act afloat.

With its first public disclosure of Obamacare demographic data, the Department of Health and Human Services said that of the 2.2 million who enrolled in new health plans through federal and state exchanges by Dec. 28, just 24 percent were between the ages of 18 and 34. …

The White House, however, originally estimated that 2.7 million of a projected 7 million people — or nearly 40 percent — enrolling in Obamacare by the end of March would be from the youngest demographic.

The long-feared “death spiral” occurs if the demographic mix of participants is undesirable, so that costs are higher than anticipated and insurance carriers are forced to increase premiums. Which, in turn, will drive relatively healthy individuals out of the system, thereby making the situation even worse. So far, such a downward spiral appears to be a legitimate concern.

What I don’t understand is this: healthy young people are desired in the exchanges because they pay too much for their insurance, thereby subsidizing older, sicker participants. But the figures released today show that so far, a whopping 79% of all signups are eligible for subsidies. The small minority who do not receive subsidies (21%) are obviously not enough to pay the freight for the 79% who get government money, so it is hard to see how Obamacare can ever add up as a sustainable program. Unless the administration assumes that it will be an endless drain on the federal budget.