WASHINGTON – Arizona leads the nation in the percentage of children who enrolled in health care through the federal marketplace, according to the latest numbers from the Department of Health and Human Services.
But the state trailed the national average in every other age category after the opening round of enrollment in Obamacare – including the desirable 18- to 34-year-olds, where Arizona was second-worst in the nation, beating only West Virginia.
While experts said the number of under-18-year-olds “bodes well” for the insurance program in Arizona, the lack of young adults could be problematic, as that relatively healthy age group is needed to make coverage affordable.
“Young people tend to be a little bit healthier than older people,” said Sara R. Collins, vice president of health care coverage and access for the Commonwealth Fund.
“They carry a lower risk of having high medical expenditures” that drive up costs to insurers and, in turn, to consumers, she said.
The HHS numbers released Thursday showed that about 21 percent of the 120,000 people in Arizona who enrolled in the Affordable Care Act through healthcare.gov in the first six-month enrollment period were under age 18. Nationally, just 6 percent of the more than 8 million people who enrolled in that time were children.
John Hsu, an associate professor of health-care policy at Harvard Medical School, noted that children cannot sign up for policies themselves, which could mean that more families in Arizona got insurance. He thinks that “bodes well for the program.”
“I think that’s a promising sign for the acceptability and sustainability of the exchanges, in general,” Hsu said of the family involvement.
Families have “a slightly different set of reasons for signing up early” than people with illnesses who may have rushed to get coverage when it became available, he said.
“If you have children, and you’re a parent – and I’m a parent – then one is likely to be concerned about making sure that they have access to health care” when they need it, Hsu said.
Not only are children generally healthier, he said, families could be more oriented to cost-saving preventive care that “has slightly different implications for future spending and premiums.”
But while a large share of children is good news for the federal marketplace in Arizona, the state’s relatively low number of “young invincibles” may spell trouble in the long run. Nationally, the 18-34 age group made up 28 percent of all enrollees; the share was 21 percent in Arizona and 19 percent in West Virginia.
A Kaiser Family Foundation report in December outlined the potential impact of low enrollment by young adults: If they accounted for only 25 percent of enrollees, “overall costs in individual market plans would be about 2.4 percent higher than premium revenues.”
That difference would decrease insurers’ profits, which they might try to recoup through higher premiums, the report said. If increases were too high, it could trigger a “death spiral,” driving consumers away, which would raise costs, a process that would keep repeating itself.
“However, a 1 to 2 percent premium increase would be well below the level that would trigger a ‘death spiral,’ which would occur if insurers needed to increase premiums substantially,” the report said.
While the young adult numbers are lagging in Arizona, experts said the high number of children could help offset that.
Audrey L. Halvorson, chairwoman for the health care costs work group for the American Academy of Actuaries, said a larger risk pool is almost always a good thing for insurance premiums because it creates stability.
“I like to think of it as a swimming pool,” Halvorson said in an email. “A small child-size wading pool is affected more from a large boulder being dropped into it than an Olympic-sized pool with the same boulder.”
One critic of Obamacare said it’s too early to draw conclusions about the success or failure of the program based on enrollments.
“What I think the people who are pro-Obamacare would like to show is that there’s not going to be a death spiral, which is where predominantly older and sicker people sign up but young people don’t,” said Tom Jenney, the Arizona director of Americans for Prosperity. “That’s what they would hope.”
Of the 120,071 Arizonans who selected a health-care plan through the new Affordable Care Act’s federal marketplace, a higher percentage were under age 18 than in any other state. Arizona and U.S. numbers by the end of the first enrollment period (national numbers in parentheses):
- Under 18: 21 percent (6 percent)
- 18-25: 8 percent (11 percent)
- 26-34: 13 percent (17 percent)
- 35-44: 14 percent (17 percent)
- 45-54: 18 percent (23 percent)
- 55-64: 24 percent (25 percent)
By plan type:
- Bronze plan: 12 percent (20 percent)
- Silver plan: 60 percent (65 percent)
- Gold plan: 14 percent (9 percent)
- Platinum plan: 13 percent (5 percent)
- Catastrophic plan: 1 percent (2 percent)
By financial assistance:
- Subsidized: 77 percent (85 percent)
- Unsubsidized: 23 percent (15 percent)