Young invincibles: how important are they, really?

You might have seen media stories that frame the success or failure of the new health insurance law as entirely dependent on young adults, sometimes called “young invincibles.”

They’re important, for sure. But maybe not for the reasons you think. A recent report from the Kaiser Family Foundation suggests that young adult enrollment won’t actually make or break the system.

UW students volunteer with Healthplanfinder to help reach out to their young adult peers and encourage them to sign up for insurance.

UW students volunteer with Healthplanfinder to help reach out to their young adult peers and encourage them to sign up for insurance.

The common story goes like this: If healthy young adults don’t pay into the system in droves, premiums will skyrocket for everyone — and that will further discourage people from enrolling. This could create a “death spiral” for the insurance exchange.

Why? Health insurance depends on a mix of healthier and unhealthy people all being in one giant “pool” together. For example, if you have a bad year and use a lot of medical care, drawing a lot of money out of the pool, then someone else needs to stay healthy that year and use very little care.

Younger people tend to be healthier, according to the common story, so more young people means older, sicker people won’t drain the funds.

Myth-busting  

But, according to the Kaiser study, even if the number of young enrollees in the insurance pool falls below the targeted 40%, individual premiums will barely be affected.

Even if only half the targeted number of young enrollees actually pay into the system, premiums will only rise for everyone else by 2.4%, according to the study.

That’s about where our state’s Washington Healthplanfinder started out, at half the long-term target. During the early days of enrollment, nearly 20% of enrollees were between the ages of 18 to 34, according to a November enrollment report. Efforts to market to that age-group will likely raise the percentage.

Young adults will continue to be a focus mostly because so many of them need insurance. Nearly 23% of young adults in King County from age 25 to 34 were uninsured, before Washington Healthplanfinder launched. That compares to under 10% uninsured for ages 55 to 64.

For the pool, it’s all about health, not age

What’s more, it isn’t age that matters when it comes to mitigating risk and costs in the insurance pool — it’s health. The key to keeping the system afloat, says Kaiser, is to recruit enough healthy enrollees, no matter what their age.

“It is important to attract the ‘young invincibles,’ but maybe with a greater focus on the ‘invincible’ part,” the KFF study said.

A Kaiser Health News article quoted Seth Chandler, a law professor and insurance specialist at the University of Houston, as saying that all the hype about “young invincibles” isn’t due to their overwhelming significance in the health insurance market. Instead, it’s simply that age is one of the only indicators of health that insurers can consider in their pricing (ever since the Affordable Care Act eliminated the use of “preexisting conditions” to set insurance rates).

“People have focused on age because that is the only data we have,” Chandler said. “But the real issue is the health status of the people we enroll.”

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