A government bailout of the health insurance industry looks increasingly likely as too few young, healthy people have signed up for insurance on the Affordable Care Act's, or "Obamacare's," new health insurance exchanges.
For the health insurance exchanges to be financially viable, a sizable portion of its enrollees (the Obama administration estimates 38 percent), need to be in the 18 to 35 age range. Without a sufficient number of enrollees from that low-health-costs age group, industry payments to health providers will be higher than expected.
Those higher costs could lead to higher premiums, which could lead to fewer enrollments, which could lead to even higher premiums, and so on. This is known as the "death spiral."
To prevent this "death spiral," a provision was added to the ACA that would bail out the insurance companies who participate in the exchanges if they do not get enough young enrollees.
The Department of Health and Human Services announced Monday that 2,153,421 people had picked out a plan on the ACA exchanges through Dec. 28. About one in four, 24 percent, were in the 18 to 34 range. HHS did not announce, though, how many of those had actually completed the transaction by purchasing the plan.
According to a Reuters analysis of the seven states and the District of Columbia which have data available, only about 22 percent of enrollees are 18 to 34, 13 percentage points less than what the administration says is needed. And that number could be higher than the national average because of the young congressional staffers who are required to enroll in the D.C. exchange.