The White House acknowledged that it is depending on young people to enroll for an insurance plan offered by the Affordable Care Act (ACA) exchanges to help finance the care of older, sicker adults. But things are not going as planned and will likely not improve anytime soon.
The Harvard University Institute of Politics released the results of a survey in early December that found only 29 percent of adults aged 18 to 29 who currently have no coverage said they plan to enroll. A majority, 57 percent, disapproved of the law altogether, and 51 percent believe their health care costs will rise as a result of Obamacare. This phenomenon will need to change drastically, and quickly, for the President's signature legislation to realize its intended purpose.
Economics of Obamacare
The capstone principle of the Affordable Care Act relies on millions of young, healthy people to enroll and pay premiums, but who don't visit the doctor very often. This would offset the costs associated with older, sicker people visiting doctors more often. The widely-reported goal of the Obama Administration is to enroll 7 million people in the exchanges by mid-2014, with 2.7 million of them being under the age of 34. But the malfunctioning Healthcare.gov website, along with thousands of Americans reporting their policies were cancelled as a result of Obamacare, has curbed the enthusiasm of this very important demographic.
The White House has yet to release statistics on the number of people who have enrolled thus far. The National Journal reported that 29,000 people enrolled in the two-day period from December 1 to 2, a strong showing after the website re-launched after much-needed repairs. Those numbers extrapolated over the next six months still would not equal 7 million. Nobody knows exactly what will happen if enough young people do not enroll. But David Axene of the Society of Actuaries told the Christian Science Monitor that if the number of young people enrolled is 20 percent or less of the total, premiums would skyrocket for everyone, regardless of age.
Marketing Efforts By The Administration
President Obama said he liked the name “Obamacare” early in 2013, and often used it when referring to the law. But several subsequent polls, including one by CNBC, found that more Americans opposed “Obamacare” vs. “The Affordable Care Act” (that same poll found that 30 percent didn't know what ACA was). Democrats have since gone through a re-branding, and now refer to the law by its actual name. The Department of Health and Human Services (DHS) has spent at least $11 million on public relations and marketing since 2012, according to the Washington Times. But when the desired results were not achieved, different measures had to be taken.
DHS wanted to create an ad campaign that was catchy and happy, much like those J.G. Wentworth Youtube commercials that make people think of J.G.Wentworth first, when they “need cash now.” The White House announced in August that it is holding an American Idol-type contest in which young people produce videos that encourage their peers to sign up for Obamacare. Erin McDonald, 26, was declared the winner in early December for her video entitled “Forget About The Pricetag,” a play on British singer Jessie J's 2011 hit “Price Tag.”
The winning video, as of publishing, has received 51 thumbs up and nearly 1,400 thumbs down on Youtube.
If All Else Fails…
One way the government will be able to make up for some of the shortfall is the penalties for those who do not sign up for insurance. The basic penalty is $95 per year, or 1 percent of your adjusted gross income for people who make more than $19,500. This is still less than buying a policy for most people, which appears to be the attitude of most millennials.
The White House is hoping for a surge in enrollments throughout December, as all policies bought and paid for by December 23 will take effect January 1.
Originally from southern Colorado, Roger Reed is an insurance agent, blogger and fly fisherman.