More young people are enrolling in Obamacare. According to a recent report, the Department of Health and Human Services (HHS) compared the proportion of young enrollees to enrollment data for 2014. It was found that in mid-January last year, 29% of enrollees were under the age of 34 and that this year, this number has risen slightly – people under the age of 34 made up 33% of those who chose a new plan. It is expected that the number of young enrollees will rise by February 15th, 2015, the date which marks the end of Open Enrollment.
In May 2014, HHS reported a surge of young adults (in the age group 18-34) in Health Insurance Marketplace enrollment, which helped Obamacare sign-ups to move beyond the target. The report said that 2.2 million (28 percent) of young adults among eight million selected a marketplace at the end of the first enrollment period that spanned from October 1 to March 31, 2013 while 1.2 million young adults among 3.8 million enrolled in the sixth and final reporting period that began on March 2 and ended on April 19, 2014 pushing the enrollment beyond the target. This is a good sign as there were concerns regarding the viability of Obamacare if mostly sick or elderly people signed up for the marketplace plans.
As per the New York Times report, the President also said that enrollment for health insurance under the Affordable Care Act surpassed the goal and the role of young adults is quite evident. During the early months of enrollment, the number of young people in the age group 18 – 34 and who tend to be healthier who were signing up amounted to only 25%. The number increased at the last minute enrollment as expected by the White House officials. Those who had started the enrollment process, but not completed were given grace period after the March 31 deadline. White House officials opined that the high enrollment rate of young people is likely to keep premiums lower compared to what they would have been otherwise.
So, how does the enrollment of more young adults result in lower premiums? For every older enrollee, a group of young people is required to cover the costs as the older people can’t be charged more for their care as per the Affordable Care Act. Young enrollees effectively subsidize the older enrollees in the 50 to 64 age band who are less healthy than the younger group. If enough healthy people are not signing up, insurance companies will have mostly high-cost consumers on their plans and they will be left with no other option but to increase the premium cost. No doubt, this will drastically affect the long-term viability of Obamacare.
A 2013 Bloomberg report draws attention to a survey conducted by Morning Consult (a Washington-based media company), which revealed that around 56 percent of young people in the age group 18 to 29 support Obamacare. The report lists mainly two reasons for this support.
- Federal Subsidies – People who earn up to 400% (up to $45,960 for an individual and $94,200 for a family of four) of the poverty line are eligible for subsidy in premium cost while those who earn less than 250% of the poverty line ($28,725 for a single person and $58,875 for a family of four) are eligible for extra subsidies in out-of-pocket costs such as deductibles and co-payments. However, the actual amount of subsidy depends upon the income, age and location of the enrollee.
- Handling Emergency Situations – Though younger people rarely use insurance, they may end up paying a larger sum in case of unpredictable healthcare needs (for example, accident) if left uninsured. Marketplace plans are really helpful to handle this kind of emergency situations since they cover a set of health benefits known as ‘essential health benefits’ which include ten categories of healthcare service. This set comprises mental health and brand-name drugs or pre-natal care which is not typically covered by private plans outside the healthcare exchanges.
However, the overall percentage of young people enrolled does not guarantee that the Obamacare program will work perfectly in all the insurance marketplaces across the country. Each state needs to be considered separately as the insurance is pooled at the state level.
In order to receive proper reimbursement, physician practices should verify the insurance details of their patients enrolled into Obamacare plans before scheduling an appointment to know whether they are eligible for federal subsidies. Since verifying each patient’s insurance details with the insurer will be a tedious task for physicians, they can seek the support of a professional medical billing and coding company that offers insurance verification services. They can streamline their billing process effectively with the help of experienced billing and coding professionals in the company.