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Home Publications Blogs Beat the Press The Obsession with Age-Skewing in Obamacare Continues

The Obsession with Age-Skewing in Obamacare Continues

Monday, 13 January 2014 05:33

It is interesting who signs up for Obamacare and who doesn't, but the idea that we need the "young invincibles" to save the program is just flat out wrong as a recent analysis by the Kaiser Family Foundation showed.  For this reason it was disappointing to see this piece by Sarah Kliff in Wonkblog this morning.

There is a big issue as to whether enrollment is skewing by health. If sick people disproportionately sign up for the program then it will make its finances untenable. But age really doesn't matter much in this story. A healthy older person will on average pay three times as much to support the program as a healthy young person, with neither getting any significant payback since they are healthy.

That's the arithmetic, it's about as simple as it gets.

Comments (6)Add Comment
written by skeptonomist, January 13, 2014 8:33
The target of efforts to get people to sign up or not sign up is mostly young people. This is because a) young people have fewer chronic health problems; and b) older people tend to have families and other responsibilities that make the consequences of a major illness more serious. People in charge of propaganda campaigns will direct their money and efforts to the group in which it is likely to make the most difference, and this the the young presumably careless people rather than the older people who are likely to sign up at a high rate anyway, or if not have their opinions firmly shaped by Fox News.

This is a matter of costs and benefits. Sometimes economics is more complicated than the simplest totals.
Undertreatment of the sick is another way to turn a profit
written by Rachel, January 13, 2014 8:39

Back in the nineties, when physicians were feeling threatened by HMOS, even they complained that HMOs undertreat patients. As was said on PBS: "[E]ven the best HMOs undertreat the sick. ... HMO stroke patients get less rehabilitation and are more likely to end up in a nursing home." (I presume they mean, go into a nursing home to languish and die.) And who goes into an HMO? Mainly, in my experience, it's people who don't have a lot of choices. And there's nothing like the ACA for taking away choices. Especially for the lower middle class.
Age does make a difference...
written by David Helveticka, January 13, 2014 1:17
Oh of course, if 10 healthy adults sign up for every unhealthy adult, then the system doesn't need the young people? Makes sense. Except for the little detail:
Where are you going to find the 10 HEaLTHY adults to pay for 1 unhealthy adult. Sorry, the older you get the unhealthier you are. And young people under 30 generally don't have health problems, so it's easier to find 10 healthy young people then 10 healthy oldsters.

The math is the same---those who are NOT sick have to eventually pay for those who are Sick, just as those who don't work (including retired people) have to survive of the productivity of those who don't work. Signing up young people just makes the math much better.
The young unsick.
written by chris herbert, January 13, 2014 3:13
If the young are so invincible they aren't going to sign up, at least they aren't going to get sick much and put a big drain on the system. This could be a wash, in my humble opinion.

It seems to me that the real group you want are the 30-50s who will be mostly healthy AND can afford paying for good policies.
You missed the point
written by Okra, January 13, 2014 4:33
"Where are you going to find the 10 HEaLTHY adults to pay for 1 unhealthy adult. "

Older people will still be charged much more than younger people. If the amount is 3x as much, then you would need considerably less young people to offset expensive (sick or old) people. As long as they are paying more but using their policies less, the math will work.
Signing up young people is still valuable
written by anonymous coward, January 14, 2014 5:39
To be fair, she did not really write that failing to enroll young people would be the law's demise. Even if the program remains viable with older enrollees, getting young people on board would seem a valuable goal in itself. And judging the success of the law against the administration's own targets (including regarding the age mix) also seems meaningful.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.