Young adults not as crucial to reform success

Opinions vary regarding whether enrolling young adults will lead to reform success. On one hand, experts believe the number of young adult sign-ups and the male-to-female ratio will determine success. Others say that having more young, healthy people purchasing healthcare is not as crucial as people think, according to an opinion piece published on

Insurers must rake in enough premiums to cover what they pay out as benefits, so not having enough young, healthy people could potentially increase premiums for the rest of the risk pool.

However, those in the industry may have overly obsessed over the notion that this will make the exchange plans more expensive and discourage the young invincibles from purchasing coverage, suggests Mark V. Pauly, Ph.D., professor of Health Care Management, Business Economics and Public Policy at The Wharton School in Philadelphia.

The industry needs to focus on another ACA guideline--large premium subsidies. For those eligible, consumers pay anywhere from 3.3 percent to 9.5 percent of their annual income for coverage. Meaning, they do not pay the actual premium cost, according to Pauly.

So what does this mean for health payers? The actual charged premium will not affect the net premium paid by older individuals who assume more risk. If young adults forgo signing up for a health plan, it will not matter for the older, sick customers whose premiums are subsidized.

Of course, this goes against the prior assumption that getting young, healthy adults to enroll in exchange plans is key to guaranteeing premiums won't increase under the reform law, FierceHealthPayer previously reported.

But if insurers can assess their risk pool early on and determine the different risks, not having young adults should not influence the total amount of premiums they collect to cover costs, Pauly notes.

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