In May, Emanuel said he worried young people would be “bewildered” by health reform in general and the insurance exchanges in particular.
“The consequence would be a disproportionate number of older and sicker people purchasing insurance, which will raise insurance premiums and, in turn, discourage more people from enrolling. This reluctance to enroll would damage a key aspect of reform,” Emanuel wrote.
Many young adults face a penalty for not enrolling that is projected to be far less than the costs of insurance coverage they could receive, Gonshorowski said.
The penalty for non-compliance starts at $95 for the first year.
If low-cost individuals are encouraged to pay the penalty and are not participating in the exchanges because of high premiums and other associated costs, the risk pool could be dominated by higher-cost enrollees, leading to further increases in premiums. This could begin a “rate spiral,” Gonshorowski said, which would drive even more young people out of the market.
Gonshorowski’s analysis, however, also shows that some states will see reductions in premiums.
Young people in New York are expected to see a nearly 29 percent price reduction. And for young people in Colorado, premiums are down 30 percent thanks to the exchanges. Residents of New Jersey, Rhode Island, and Ohio will also see the costs go down
He explained that this is because those states have already over-regulated insurance markets that have led to sharply higher premiums through adverse selection.
“If you are already regulated to a point that looks and smells like the ACA,” he said, “when you actually adapt to the law, then you are not adapting so much.”
The Congressional Budget Office estimated that around 7 million people will enroll in the exchanges in the first year. This means that approximately 270,000 would have to enroll each week.
The Obama administration has yet to release official numbers regarding how many Americans have signed up for insurance. White House spokesman Jay Carney said Wednesday the initial numbers will be released in mid-November.
The administration has projected that 500,000 people would enroll in the first month. As of Tuesday, however, Gonshorowski said roughly 50,000 people have enrolled in the exchanges. This means that at the current rate it would take nearly 50 years to sign up the 30 million projected to be enrolled within the next five.