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WSJ: Young Are Avoiding Obama-Care In Droves

From the Wall Street Journal:

Young Avoid New Health Plans

Early Buyers of Coverage Are Older Than Expected, Raising Expense Concerns

By Christopher Weaver and Timothy W. Martin | November 4, 2013

Insurers say the early buyers of health coverage on the nation’s troubled new websites are older than expected so far, raising early concerns about the economics of the insurance marketplaces.

They are also far poorer. Hence the vast majority being shunted off to Medicaid.

If the trend continues, an older, more expensive set of customers could drive up prices for everyone, the insurers say, by forcing them to spread their costs around. "We need a broad range of people to make this work, and we’re not seeing that right now," said Heather Thiltgen of Medical Mutual of Ohio, the state’s largest insurer by individual customers. "We’re seeing the population skewing older." …

The average enrollee age at Priority Health, a Michigan insurer, has ticked up to age 51 for newcomers, from about 41 years old for plans offered for the current year, said Joan Budden, chief marketing officer. Arise Health Plan, Wisconsin’s largest nonprofit insurer, said more than half its 150 signees are over 50, a higher proportion than expected, while declining to be specific on its target age…

Medical Mutual [of Ohio], for instance, has seen health-law enrollments so far in the "low triple digits," and Priority Health has seen fewer than 100. Both are selling on the federal exchange…

In other words, major insurers in Michigan, Wisconsin and Ohio have only had around 100 or fewer sign ups — after more than a month. What a success story!

In states that are running their own marketplaces and have seen smoother rollouts, officials are now also reporting a similar phenomenon, suggesting the economics of the law play a role, too. In Connecticut and Kentucky, which have enrolled more than 4,000 people each in private health plans so far, the largest segments of enrollees in new commercial health-law plans are over age 55, much older than industry actuaries say they had anticipated…

Age expectations for enrollees vary by market, but one adviser and several insurers said an average age of around 40 would be a typical target…

The law bars insurers from charging sicker customers higher rates, and limits the amount they can charge older people compared with younger ones. It offers new subsidies to help cover premiums available to many lower-income applicants. Insurers are relying on a steady stream of younger, healthier enrollees to offset medical bills of older, sicker customers

"The more sick people who do enroll, the more exposed [insurers] become," said Jim O’Connor, an actuary for Milliman Inc., a consulting firm…

Which leads to the dreaded ‘death spiral’ phenomena. Which happens when an insurance company ends up saddled with only high risk, elderly and ill enrollees. And they inevitably go bankrupt.

So far, the young have remained elusive. At a health-law education event in North Carolina last week, more than 100 people, mostly in their 40s and 50s, came. "I actually didn’t see a single young person," said Liz Gallops, an insurance agent from Raleigh, N.C., who attended. In Kentucky, nearly 40% of 4,631 enrollees in private health plans are over age 55, while 24%, including children, fall under age 34

A much higher portion of young people signed up for Medicaid plans, which some states are expanding under the law, state data show…


The early hurdles could leave insurers with a less profitable cast of enrollees next year, said Matthew Borsch of Goldman Sachs in a note last week to investors. Mr. Borsch, who earlier anticipated the industry would profit, now projects losses of "less than $100 million" on pretax 2014 earnings…

Suckers! But it serves them right. That’s what they get for believing Obama.

This article was posted by Steve on Tuesday, November 5th, 2013. Comments are currently closed.

4 Responses to “WSJ: Young Are Avoiding Obama-Care In Droves”

  1. Astravogel says:

    Bumper Stickers:
    heh heh heh

  2. canary says:

    Some of the changes are going to kill the elderly off early in the game.

    • captstubby says:

      “You can keep your Plan;”

      formerly known as the”Great Leap Forward ”
      “The Big Lie”:
      a blatant lie about its opponents, told often enough, assumed to be true. The Big Lie (the ideology itself) was promoted by the party’s propaganda wing.

      The Three Years of Great Chinese Famine
      referred to by the Communist Party of China as the Three Years of Natural Disasters or Three Years of Difficult Period
      by the government, was the period in the People’s Republic of China between the years 1958 and 1961 characterized by widespread famine. Drought, poor weather, and the policies of the Communist Party of China contributed to the famine, although the relative weights of the contributions are disputed due to the Great Leap Forward.

      The great Chinese famine was caused by social pressure, economic mismanagement, and radical changes in agriculture. Mao Zedong, chairman of the Chinese communist party, introduced drastic changes in farming which prohibited farm ownership. Failure to abide by the policies led to persecution. The social pressure imposed on the citizens in terms of farming and business, which the government controlled, led to state instability. Owing to the laws passed during the period and Great Leap Forward during 1958–1962, according to government statistics, about 36 million people died in this period. Until the early 1980s, the Chinese government’s stance, reflected by the name “Three Years of Natural Disasters”, was that the famine was largely a result of a series of natural disasters compounded by several planning errors. Researchers outside China argued that massive institutional and policy changes that accompanied the Great Leap Forward were the key factors in the famine, or at least worsened nature-induced disasters.Since the 1980s there has been greater official Chinese recognition of the importance of policy mistakes in causing the disaster, claiming that the disaster was 30% due to natural causes and 70% by mismanagement.
      During the Great Leap Forward, farming was organized into communes and the cultivation of private plots forbidden. Iron and steel production was identified as a key requirement for economic advancement. Millions of peasants were ordered away from agricultural work to join the iron and steel production workforce.
      most famines do not result just from lower food production, but also from an inappropriate or inefficient distribution of the food, often compounded by lack of information and indeed misinformation as to the extent of the problem. In the case of these Chinese famines, the urban population (under the dictates of Maoism) had protected legal rights for certain amounts of grain consumption, whereas the rural peasantry were given no such rights and were subject to non-negotiable production quotas, the surplus of which they were to survive on. As local officials in the countryside competed to over-report the levels of production that their communes had achieved in response to the new economic organisation, local peasants were left with a vastly decreased surplus in order to meet their quotas, and then no surplus at all. When they eventually failed to produce enough crops even to meet the quotas to feed the cities, peasant farmers were unfairly accused of hoarding, profiteering and other counter-revolutionary activities by Chinese Communist Party officials, who cited the massively inflated production estimates of the local party leaders as evidence.
      As the famine worsened, these accusations prompted widespread atrocities (including massive grain confiscations, leaving millions of peasants to starve) by Maoist party officials, who sought to direct blame away from the harmful changes in agriculture policy and the massive overestimation of grain yields. At the time, the famine was almost exclusively blamed on a conspiracy by “enemies of the people” and “unreformed kulak elements” among the peasant farmers, who starved at a rate nearly three times that of the urban Chinese population.
      Local party leaders, for their part, conspired to cover up shortfalls and reassign blame in order to protect their own lives and positions. In one famous example, Mao Zedong was scheduled to tour a local agricultural commune in Shaanxi province during the heart of the famine in order to assess the conditions for himself; in preparation for his visit, local party officials ordered hundreds of starving peasants to carefully uproot and transplant hundreds of thousands of grain stalks by hand from nearby farms into one “model field”, which was then shown to Mao as proof that the crops had not failed. In a similar manner to the massive Soviet-created famine in Ukraine (the Holodomor), doctors were prohibited from listing “starvation” as a cause of death on death certificates. This kind of deception was far from uncommon; a famous propaganda picture from the famine shows Chinese children from Shandong province ostensibly standing atop a field of wheat, so densely grown that it could apparently support their weight. In reality, they were standing on a bench concealed beneath the plants, and the “field” was again entirely composed of individually transplanted stalks.

      Some activists went against the Great Leap Forward movement, but they were seen as the opponents of Mao and were silenced in the purges of the following “Anti-Rightist Movement”.
      After the Famine, then-Chairman of the People’s Republic of China Liu Shaoqi concluded that the reason for the calamity was “30% natural disaster, 70% policy”. In the later Cultural Revolution, Liu was denounced as a traitor and an enemy agent going against the Three Red Banners.


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