What's the quickest way to drive up premiums? Get the young and healthy to never sign up in the first place.
As I mentioned, the exchanges need a large number of healthy people to enroll if premiums are to stay low. This is because an insurance policy is a pooling of risk, such that what consumers pay in monthly premiums is more or less the same, and the level of benefits is also the same, across the entire policy. A very sick patient is rather costly to care for and looks like a gallon of red ink to the insurer; a healthy one is very cheap to insure and looks like dollar signs. So that's the insurance companies' calculus, and the insurers will have to jack up rates if they see that only sick people are signing up.
Getting sick people to enroll in Obamacare is easy. They're desperate for coverage and many have gone without needed care to scrimp for savings. Nope, the tricky part, unfortunately, is motivating young people to sign up. They have a calculus too, and it's the opposite one. A 25 year old guy in good shape has no real financial incentive to join a risk pool where the average member is sicker and costlier than him. He's just subsidizing someone else's care and is unlikely to receive as much of the benefits.
The bungled website only feeds into this dynamic. By throwing up an annoying barrier to enrollment, they're further dampening the likelihood that a young person will put up with the nuisance of buying something they didn't need very much in the first place. When the insurance companies reevaluate their pricing schemes for next year, they're going to have to take a hard look at their covered populations. It's not a pretty picture right now.
As I mentioned, the exchanges need a large number of healthy people to enroll if premiums are to stay low. This is because an insurance policy is a pooling of risk, such that what consumers pay in monthly premiums is more or less the same, and the level of benefits is also the same, across the entire policy. A very sick patient is rather costly to care for and looks like a gallon of red ink to the insurer; a healthy one is very cheap to insure and looks like dollar signs. So that's the insurance companies' calculus, and the insurers will have to jack up rates if they see that only sick people are signing up.
Getting sick people to enroll in Obamacare is easy. They're desperate for coverage and many have gone without needed care to scrimp for savings. Nope, the tricky part, unfortunately, is motivating young people to sign up. They have a calculus too, and it's the opposite one. A 25 year old guy in good shape has no real financial incentive to join a risk pool where the average member is sicker and costlier than him. He's just subsidizing someone else's care and is unlikely to receive as much of the benefits.
The bungled website only feeds into this dynamic. By throwing up an annoying barrier to enrollment, they're further dampening the likelihood that a young person will put up with the nuisance of buying something they didn't need very much in the first place. When the insurance companies reevaluate their pricing schemes for next year, they're going to have to take a hard look at their covered populations. It's not a pretty picture right now.
