July 18, 2013
Selling Obamacare to young people

With states and the federal government scrambling to get Obamacare's insurance exchanges operational this fall, the Obama administration is grappling with how best to sell young people on the idea of purchasing coverage through the exchanges. An extensive Washington Post article yesterday examined the challenges.

The entire Obamacare program has been in flux lately, with the administration delaying the employer mandate, employment verification, and income checks. It's a reminder to the administration that implementing a complicated, convoluted health care reform program is - well, really complicated and convoluted.

While some underlying assumptions of Obamacare are being delayed or reexamined, the Post's analysis highlighted one vital truism of the law: the success of Obamacare's exchanges rests on healthy young people overpaying for health insurance so the money can be shifted to older workers.

[Obama senior advisor David Simas] needs them to buy health insurance, and, in some cases, spend hundreds of dollars a month for it. If they don't, the new insurance marketplaces -- the absolute core of Obamacare -- will be filled with older, sicker people, and premiums will skyrocket. And if that happens, the law will fail.

It remains to be seen what young people will think about that, once the individual mandate kicks in and the impact of spending more of their paycheck on health care is felt. They are, naturally, an attractive source for an administration that is trying to create a larger risk pool for the insurance exchanges. But logically, they're only attractive if they pay more as a bloc than they cost in benefits - only if they overpay.

As the Post notes, "How many younger people are needed each year to hold down premiums depends on how many people sign up for the marketplaces. If the total this year is 7 million people, then about 2.7 million need to be in the 18-to-35 set." Young people will help hold down premiums - for other people.

The young are being told not to worry, federal subsidies will help them afford policies. Researchers studying how to sell the program to young people found this to be a significant inducement:

When they asked in a recent survey whether a $210 premium was affordable, only 29 percent of likely marketplace enrollees said yes. Then, Undem and Perry phrased the question a bit differently. They told the focus group participants that, with their tax credits, they would save "$1,908 a year compared to what you would pay on your own." All of a sudden, 48 percent of the participants thought that insurance was affordable. But 48 percent is still less than half.

But "what you would pay on your own" doesn't mean what young people would pay for coverage in an unfettered marketplace, it represents what they would pay for coverage with Obamacare's mandated benefits - benefits they may not want and the administration is confident young people will underutilize. Without underutilization, there isn't money to make the cost shift that will keep premiums down for older people in the exchanges.

I guess that's what the 52% of the study group that wasn't wowed by that messaging shift grasped intuitively.

Posted by Adam Faber at July 18, 2013 04:08 PM | Email This
Comments
1. Help, Captain Obvious!

"...the success of Obamacare's exchanges rests on healthy young people overpaying for health insurance so the money can be shifted to older workers."

The success of ANY health insurance system rests on those of us who are healthy overpaying for healthcare, so the less-healthy can have care.

(Our health-insurance system has been broken for so long, some of us have, evidently, forgotten what a working system entails.)

Oh, and when those young people understand that "the unfettered market" is the one where they overpay for their health care to buy their insurance company's CEO a bigger yacht, Obamacare will indeed begin to look inadequate, but not in the way this post intends.

Posted by: tensor on July 18, 2013 06:58 PM
2. Do young adults value health insurance? The answer is yes, but it has always been un-affordable and this law makes it drastically worse. I am a healthy young male who could not /can't afford health insurance, between student loan debts, car payments, rent and an almost maxed out credit card there is no excess to go around, yet I make more than the minimum amount where the govt will provide subsidies. Now that Obamacare has been implemented I find that health insurance prices are almost doubled from what they were previously. Do they actually think I will be putting the premiums on my credit card? The only option I have is to continue go without insurance and make sure my tax withholding always just barely covers what I will owe in normal taxes, to avoid the IRS health care penalty. There is no other way to survive this thing. The law is a complete disappointment.

I don't think an NFL commercial or Facebook advert will induce very many of my generation to drop $300 a month on a health insurance policy. This is supposed to be the Affordable Care Act and it clearly is not. If I had an extra $300 a month lying around I would use it to pay off what I already owe, not incur more debt. I would think Mr. Obama, who is overseeing a 17 trillion dollar debt would think similarly about spending the nation's money. I think he was absent the year they taught economics.

Posted by: Anon on July 18, 2013 07:39 PM
3. I can play the poll game as well, howabout?:

Statistics show that over the next 10 years 20 million more Americans will die while under the insurance plans mandated by Obamacare than those without those plans....Do you support the Obamacare law?

Posted by: doug on July 18, 2013 07:40 PM
4. Thanks to ObamaCare my insurance company will be exiting Washington state at the end of the year. Going to the state web site to find out what I can do to replace it, the ObamaCare approved insurance will only cost me $511.00 a MONTH more.

I'm not 100% sure what I should do first. Stop eating, stop driving or stop paying rent. Or maybe a combination of two of the three.

Thanks Barry.

Posted by: Oscarphone on July 18, 2013 10:05 PM
5. Sure they are, Oscar. Are they taking their business to a state that isn't subject to the ACA?

Posted by: scottd on July 19, 2013 12:26 AM
6. I don't understand the age issue. Won't premiums in the exchanges be based on the actual expense of insuring someone of that age, just like they are in every individual health insurance plan I've ever seen? If that's true, young people shouldn't be subsidizing old people.

It is true that healthy people will subsidize sick people. As tensor mentions, in general that's the whole idea of health insurance. But allowing people to choose whether to get insurance leads to spiraling rates to the extent their health can be predicted (e.g., if they do/don't have preexisting conditions). This too is a basic tenet of insurance, and is the reason for the individual mandate. Unfortunately the tea partiers fought the mandate and refused to allow strong enforcement of it. I'm glad you recognize how stupid that was.

Posted by: Bruce on July 19, 2013 01:02 AM
7. Doug@3, did you see the number 20 million and just think you could use it in any sentence you felt like?

I've seen the Chamber of Commerce say "Obamacare could cause 20 million people to lose their current coverage." That's different from dying. And even that's ridiculous -- it was the worst-case scenario by a consultant and ignores the fact that those 20 million people, and many others, would get other insurance, in many cases better insurance. Politifact rated the Chamber's statement "Mostly False".

Your statement? Mostly Nuts.

Posted by: Bruce on July 19, 2013 01:10 AM
8. Headline is wrong:

It should read, Selling Obamacare to Dumb People

Posted by: Leftover on July 19, 2013 07:31 AM
9. @8 - spot on. Several leftists have already weighed in. Put yourself in their position - would you rather pay the lesser fine or the larger premium ? Bruce and tensor demonstrate once again their poor self awareness. They will continue to chase their tails - YAWN. Their superficial statements are laughable because they think anyone else would believe their BS.

Any legislation that passes without one vote from the other party is fatally flawed and you can take that to the bank. With that said, Obamacare will either evolve into single-payer with inferior medical care and rationing by the Government appointed panels - the leftists wet dream or will get drastically overhauled OR else !!!

The OR else will be our nation becoming insolvent like the City of Detroit - poster city of the left. Only cities can go bankrupt and the US would become Greece and unsustainable. The left does not really care what happens, just as long as they maintain political power.

Detroit ought to be a lesson learned for most Americans, but this country has evolved into such a dumbed down mess that makes this result doubtful.

Posted by: KDS on July 19, 2013 10:01 AM
10. "Their superficial statements are laughable because they think anyone else would believe their BS."

At which statement(s) did you laugh? When you read how ALL health insurance plans take money from us healthy participants, and spend it on the less-healthy ones? Do you consider that claim to be "BS"? Do you know of a health-insurance system which does not function in this manner?

"Any legislation that passes without one vote from the other party is fatally flawed..."

President Clinton's 1993 budget did not receive a single Republican vote. That same plan was still in effect years later, when Clinton signed several surplus budgets. Your point?

"Detroit ought to be a lesson learned for most Americans,"

What does poorly-run car companies have to do with medical plans? Do tell.

"... but this country has evolved into such a dumbed down mess ..."

At last, KDS provides a vivid and compelling example to support his claim! :-D

Posted by: tensor on July 19, 2013 10:35 AM
11. By my count @9 consists of 16 assertions. Most are nonsensical, but more important, each is logically unrelated to the assertions before and after. Is this the product of some random rant generator? Trying to respond would be like having a conversation with a stock ticker. Sheesh.

Posted by: Bruce on July 19, 2013 10:52 AM
12. @6 "I don't understand the age issue. Won't premiums in the exchanges be based on the actual expense of insuring someone of that age, just like they are in every individual health insurance plan I've ever seen? If that's true, young people shouldn't be subsidizing old people."

No, premiums will not be based on the actual expense of insuring someone of that age. Obamacare has a 3-1 rule. The law requires that the maximum ratio that can be charged for a policy is three times the amount that is charged for the youngest, healthiest population. If they were allowed to charge the actual market rates, the natural ratio would be more like 6-1.

This means that to lower rates a little for older workers, they'll have to jack up rates for younger workers a lot.

Posted by: young will pay more on July 19, 2013 11:02 AM
13. @11 - your counting is suspect even - itemize the 16 assertiions/I don't think there were that many. You fail to provide any substance and then hit back with the assertion that having a conversation with me is like "Trying to respond would be like having a conversation with a stock ticker".

I could just say you are batshit crazy with kneejerk response your and keep my response down to the level of effort you showed. How do you arrive at the fact that the plight of the City of Detroit is unrelated to the eventual plight of our economy if Obamacare is allowed to progress unfettered ? Hats off if you decide to give an honest response.

"President Clinton's 1993 budget did not receive a single Republican vote. That same plan was still in effect years later, when Clinton signed several surplus budgets. Your point?"

My point is that the magnitude of that budget was much less consequential (only for 1 year) than the vote for Obamacare that would affect the next 25 years and beyond. I doubt if you have the insight to comprehend that. Apples and Oranges and shallow thinking once again...

Posted by: KDS on July 19, 2013 11:17 AM
14. young: I was self-employed for years and bought healthcare insurance on the individual market, so I have rate sheets going back a few years -- long before Obamacare could have any effect on rates and insurers were free to charge whatever they wanted.

This "natural ratio" of 6-1 you mention is another rightwing myth. Looking over my rate sheets for a number of plans, the typical ratio is 3.3:1 -- not too far from the 3-1 Obamacare rule.

Posted by: scottd on July 19, 2013 11:50 AM
15. So, there are dozens of articles and commentaries about the utter failure and lies of Obamacare today.

But the single most offensive (today):

$990K Federal Grant to Teach High School Students In Los Angeles How To Promote Obamacare

Spending our money to indoctrinate kids (and I quote: "including those who scored below average on their eighth grade reading and math tests," to support something that ultimately harms them.

Despicable.


Posted by: RagnarDanneskold on July 19, 2013 11:50 AM
16. @14 - scottd, you can tell that to the young people who will pay 42% more than they would without Obamacare.

"The essence of age band compression is that younger people pay more for their coverage so that older people can pay less."

Posted by: young will pay more on July 19, 2013 11:56 AM
17. young: So, if I understand your point, I shouldn't waste my time looking at rate sheets showing what people actually pay because you have read a statistical model full of questionable assumptions that predicts different results.

Posted by: scottd on July 19, 2013 12:15 PM
18. young: So, if I understand your point, I shouldn't waste my time looking at rate sheets showing what people actually pay because you have read a statistical model full of questionable assumptions that predicts different results.

Posted by: scottd on July 19, 2013 12:15 PM
20. Ragnar: Why would I waste my time reading your wingnut headline spew when I can just look at actual insurance rate sheets and see what my actual twenty-something son will actually pay for health insurance next year?

Long story short -- the 80% hike isn't happening. We'll be getting better insurance coverage at more or less the same rate as this year. (This doesn't include possible subsidies that he might qualify for.)

Posted by: scottd on July 19, 2013 12:35 PM
21. actual insurance rate sheets and see what my actual twenty-something son will actually pay for health insurance next year?

You can. And we will wait for you to notify us when they change again.

I already got the note from Regence to EXPECT higher premiums when our renewal comes up in October. Last year the premium for my 23 yr old went UP 10%.

Oopsie - that doesn't fit the narrative, eh?

The half truths we've come to expect don't become you, especially when you tell us not to believe what we know from our own experience.

Ragnar: Why would I waste my time reading your wingnut headline spew

Because they contain FACTS and sources for them.

Oopsie - that doesn't fit the narrative, eh?

Learn to look outside the koolaid bubble - you may actually learn something, even if you hate to acknowledge learning it.

Another Union Fears 'Destructive Consequences' From Obamacare

The letter follows a separate one written last week by the heads of the International Brotherhood of Teamsters, the United Food and Commercial Workers and Unite Here, expressing similar concerns to Congress's top Democrats, Sen. Harry Reid and Rep. Nancy Pelosi. The International Brotherhood of Electrical Workers took out print ads raising alarms about the law last week as well.

Posted by: RagnarDanneskold on July 19, 2013 12:57 PM
22. Last year the premium for my 23 yr old went UP 10%.

A 10% increase? Wow, that NEVER happened before the ACA. Thanks, Obama!

Oopsie - that doesn't fit the narrative, eh?

I thought the narrative was 80% increases. Check your own posts and try to keep your story straight.

Believe what you want, Ragnar. I know what we are actually paying and what we are actually getting. I doesn't match your wingnut narrative.

Posted by: scottd on July 19, 2013 01:11 PM
23. Last year the monthly premium for our high deductible - $5000 - health coverage through Regence was $375. Last October it went up to $479/mo. Neither my son nor I have any pre-existing conditions and are both exceptionally healthy. With the high deductible policy we are 'allowed' 4 office visits each that don't count against the deductible. My son hasn't used any. I've used 2.

I fully expect our coverage to go up between 25 and 50%. When it does, we'll cancel and get on my husbands work policy.... or just pay the fine.

Posted by: RagnarDanneskold on July 19, 2013 01:12 PM
24. My point is ...

Your point, explicitly, was, "Any legislation that passes without one vote from the other party is fatally flawed and you can take that to the bank." Well, Clinton's budget passed without a single Republican vote, and what we "took to the bank" was hundreds of billions of dollars in surpluses -- exactly the outcome you right-wingers always claim to want.

Now, I'll ask again: which statements did you find "laughable," and why?

Posted by: tensor on July 19, 2013 03:21 PM
25. To all "unmovable" Lefty's here (Tensor, Bruce,etc.)

Be honest and tell everyone here that you wished you had better schooling on how good government should operate.

The reality here is that large government - and the conscious and unconscious yearning for more of it - has a repeat tail or trend of mismanagement that should not be defended - even by those on its payroll and/or those who think Unlimited government is sustainable, as it is not - nor has it ever been.

One word: Detroit; which has been run by Democrats since the early 1960's (yes, the cause of the failure - a life long teachable moment), is a perfect example of the Unlimited Government philosophy.

Have you been Left to believe any mix of Marxism / Socialism / Progressivism does not leave any trail of slavery on it's citizens?

If so, I am sorry to hear that...my solution for you all is to go to Hillsdale.edu online where thousands across the U.S. have gone this summer to learn at a cost of 0$ (i.e. FREE) the Founding and the Founders true intentions: https://online.hillsdale.edu/register

I am personally responsible for 100+ young folks in the Seattle area this summer having taken the course offered. As I say to them afterwards, don't thank me, thank yourself for helping others in the future helping them understand the many faces of tyranny.

Every scandal today repudiates over-sized and lawless government. The virus can impact any political party. The virus is today, though has taken a much larger foothold on the Left, but the RINO's on the Right (aka Republicans acting like Democrats) have the same virus too.

Madison once said that if Laws become so voluminous and changeable (i.e. Obamacare), that they cannot be read, then it really doesn't matter if people (politicians included) consent to them, it then breeds a spirit that you can do whatever you want, and can always find a cover for it.

This is unsustainable on just this one point. Thee are so many more to point out.

Posted by: Jerry on July 21, 2013 02:15 PM
26. tensor, scottd and bruce are all leftist cowards who can only function in mobs. You root for lawless big government - you show yourselves to be the product of squalor with attitudes like that.

You are all afraid to acknowledge the connection between Detroit and the future of Obamacare (if left as is). In both cases, the future is bleak and unsustainable. Are you unenlightened and ignorant of the fact that you or anyone else can be forgiven by merely coming to your senses ? Resistance to the facts shows nothing but your lack of character. You don't even know what you are fighting for !

Posted by: KDS on July 21, 2013 09:28 PM
27. KDS: As someone noted a while back, you're like an article from The Onion, in human form.

I point out what insurance companies are actually charging -- you respond with blather about leftist cowards, !!GREECE!!, and !!!!!!!!DETROIT!!!!!!!!. (What, no ACORN?)

Thanks for the laughs.

Posted by: scottd on July 21, 2013 10:17 PM
28. Orange County, CA, went bankrupt about a dozen or so years ago, yet right-wingers never seem to talk about how the bankruptcy of the government in one of the wealthiest places on earth reflects upon the governing philosophy or competence of the ruling party there. Strange.

KDS -- once again, which statements did you find "laughable," and why?

Posted by: tensor on July 22, 2013 07:12 AM
29. @28 - too numerous to bore all of the readers with. Get a clue - read other's posts.

@27 - Only in your own mind. Even the rest of your mob doesn't get it. Are you just being a contrarian or are ;you really that
obtuse ? No substance to your article. How come you are ;unable to explain any connections.

A question to you both - What are fighting for ? Right now it looks like statism and sharia law by your ardent support for this administration. What a couple of maroons !

Posted by: KDS on July 22, 2013 09:15 AM
30. @28 - too numerous to bore all of the readers with. Get a clue - read other's posts.

@27 - Only in your own mind. Even the rest of your mob doesn't get it. Are you just being a contrarian or are ;you really that
obtuse ? No substance to your article. How come you are ;unable to explain any connections.

A question to you both - What are fighting for ? Right now it looks like statism and sharia law by your ardent support for this administration. What a couple of maroons !

Posted by: KDS on July 22, 2013 09:15 AM
31. @28 - too numerous to bore all of the readers with. Get a clue - read other's posts.

@27 - Only in your own mind. Even the rest of your mob doesn't get it. Are you just being a contrarian or are ;you really that
obtuse ? No substance to your article. How come you are ;unable to explain any connections.

A question to you both - What are fighting for ? Right now it looks like statism and sharia law by your ardent support for this administration. What a couple of maroons !

Posted by: KDS on July 22, 2013 09:15 AM
32. @28 - too numerous to bore all of the readers with. Get a clue - read other's posts.

@27 - Only in your own mind. Even the rest of your mob doesn't get it. Are you just being a contrarian or are ;you really that
obtuse ? No substance to your article. How come you are ;unable to explain any connections.

A question to you both - What are fighting for ? Right now it looks like statism and sharia law by your ardent support for this administration. What a couple of maroons !

Posted by: KDS on July 22, 2013 09:15 AM
33. "(What, no ACORN?)"

We also note a distinct lack of BENGHAZI BENGHAZI BENGHAZI. Sad, really. :-)

KDS - which statements did you find "laughable," and why?

Posted by: tensor on July 22, 2013 09:50 AM
34. Statism! Sharia Law!!

All because I just wrote about what insurance companies are actually charging...

I wonder if Area Man can be bothered to point out anything I wrote that was factually incorrect.

Posted by: scottd on July 22, 2013 10:07 PM
35. @34 - Your reading comprehension has serious defects. Read slowly and think before you write. The Barack Sharpton administrations' actions demonstrate their support for Statism and sharia law.

A question to you & @33 - What are fighting for ? Right now it looks like statism and sharia law by your ardent support for this administration.

Your turn to obsfucate.


tensor spewed:
"KDS - which statements did you find "laughable," and why?"

too numerous to bore all of the readers with. Get a clue - read other's posts. Read Rag's, Dan's, Hinton and Jerry's responses to your comments. They are correct and you are wrongheaded without a leg to stand on, IMHO. Keep asking for effect and you will continue to demonstrate your lack of self-awareness and obtuseness- your call; caricature.

Posted by: KDS on July 23, 2013 02:35 PM
36. At which statement(s) did you laugh? When you read how ALL health insurance plans take money from us healthy participants, and spend it on the less-healthy ones? Do you consider that claim to be "BS"? Do you know of a health-insurance system which does not function in this manner?

Virtually everything this administration has said about the ACA is laughable. You might as well be Jay Carney barker. Pointing the finger at Insurance companies is obfuscation. You are afraid to address the failings of the ACA. Until you do, you are not addressing the issue and hence your comment is irrelevant to this post and merits no further comment for reasons explained above.

Posted by: KDS on July 23, 2013 02:53 PM
37. "...your comment is irrelevant to this post and merits no further comment for reasons explained above."

That's a lot of words to expend on something that, supposedly, "merits no further comment." My comment @1 was to point out that Adam had described a feature of the ACA as if it was novel and objectionable; in reality, the ACA shrares this feature with any and every successful insurance plan. Why you thought this simple and accurate observation about the ACA was irrelevant is rather hard to see.

I've asked you repeatedly for examples of "laughable" statements you claim to have read here, and have received nothing but silence or hand-waving, so I'll conclude you have no substantiative objection to my remarks -- other than your not liking them very much. Healthcare policy does not alone sharia law make! :-)

Posted by: tensor on July 23, 2013 04:00 PM
38. Keep asking, caricature. My, you are one obtuse SOB.

Posted by: KDS on July 23, 2013 04:03 PM
39. @37 - why are you conflating sharia law with the ACA ? You are not only obtuse but also desperate. I see that you are frustrated that Adam does not respond to your talking points. You make a good ambulance chaser.

I object to the very core of your remarks simply because you refuse to point out the failings of the ACA. As I said in my last comment - you might as well be Jay Carney barker.

Posted by: KDS on July 23, 2013 04:24 PM
40. "why are you conflating sharia law with the ACA ?"

Uh, because you asked about them? ("A question to you both - What are fighting for ? Right now it looks like statism and sharia law by your ardent support for this administration.")

"You are not only obtuse but also desperate. "

I agree that mentioning Sharia law in a dialog about the ACA (!) shows obtuse desperation, yes. :-)

"Keep asking, caricature. My, you are one obtuse SOB."

You righties sure know how to keep it classy! Maybe next time, you can avoid making claims you can't defend? That way, you wouldn't have a reason to engage in hand-waving and name-calling when you get caught. Just sayin'.

Posted by: tensor on July 23, 2013 04:47 PM
41. How exactly does the administration's actions demonstrate support for Sharia Law?

Posted by: Doctor Steve on July 23, 2013 05:06 PM
42. The only concerted effort I see to make America a theocracy is by America's Christian Dominionists and Reconstructionists, who would have all of us live under Mosaic Law, all 620 of them, with stoning to death at the Gates of the City and the cutting off of hands and other barbaric punishments. What's the difference? While I wouldn't want to endure either one, Dominionists and Reconstructionists at least pose a real threat whereas Muslims with their Sharia Law don't.

Posted by: Doctor Steve on July 23, 2013 05:25 PM
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