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The Successful ACA Implementation Marketplace Bar Is Quite Low...

Adriana Macintyre:

How reasonable is the White House’s marketplace enrollment goal?: There’s been lots of fuss about young adults and Obamacare, from the bro-tastic “rate shock” debate to more recent coverage of White House outreach efforts…. One figure that’s been bandied about is 2.7 million--the alleged magic number of 18-35 year olds required to keep premiums stable in the new marketplaces (the new term for “exchanges”)….

Individuals under 26 can stay on their parents’ insurance, if the plan includes coverage for dependents. Those under 30 have the option to buy catastrophic plans, though these plans are not eligible for subsidies like “metal-tier” plans…. If we look at just the predicted marketplace target population--setting aside those who will receive coverage under the Medicaid expansion and those below the poverty line in nonexpansion states--we’re left with approximately 11 million adults between the ages of 18 and 35. The White House target is about a quarter of that…. This strikes me as achievable, especially since their incomes are predominantly below 300% FPL, meaning most will receive subsidies to offset the cost of premiums….

I do have some lingering concerns about the scaling-up of marketplaces—the CBO estimated that enrollment would grow from 7 million in 2014 to 24 million in 2016. If actuarial estimates suggest that we need to maintain a certain ratio of young-to-old, the fact that young adults disproportionately benefit from the Medicaid expansion and extended dependent coverage could put stress on the marketplaces….

Even if I’m wrong, I think it’s an overreach to suggest that success of the entire health law hinges on this figure. Marketplace premiums have risk-selection assumptions built in—what matters is that actual enrollment matches those assumptions, not the Administration’s goal.