White House press secretary Jay Carney told TheBlaze the administration was very hopeful about an increase in youth enrolling in Obamacare, but was not definitive on the question of whether the administration would oppose a future bailout of the insurance industry.
The Department of Health and Human Services announced in December that of the 2.2 million enrolled in the Obamacare exchanges, just 24 percent were between the ages of 18 and 34. The number of young healthy enrollees should be 40 percent for the law to work, according to The Wall Street Journal.
A lack of enrollment for young and generally healthier people – cheaper to insurance – to subsidize the costs for the older and generally less healthy – could put the insurance industry into what some have termed a “death spiral,” when premiums don’t cover the cost of claims causing health care costs to surge.
Many conservative commentators have warned this would prompt a government bailout of the insurance industry.
Bringing up the lack of young and healthy enrollment, TheBlaze asked Carney Thursday during the press briefing, “Would the administration take a definitive stance that there would be no taxpayer bailout of insurance companies if worse comes to worse on that?”
Carney said the administration is encouraged by a uptick in youth enrollment, but said the troubled website posed problems for all groups. The White House spokesperson ignored our question about a potential taxpayer bailout of the insurance industry.
“What you’ve seen in the data that’s been released is that there’s been steady and significant increases in enrollments, especially in December, and that includes an even quicker increase in the enrollment of young people under 35. We expect that will continue,” Carney said. “In fact, the data that was released by [Centers for Medicare and Medicaid Services] tracks very closely with the way that the Massachusetts health insurance reform program unrolled upon implementation and that includes as it relates to the percentage of young people.”
“So, we’re encouraged by the data we’ve seen, but we’ve obviously created a lot of obstacles for ourselves in the implementation of the ACA marketplaces with the faulty rollout of the Healthcare.gov rollout,” Carney continued. “Significant improvements have been made. I think proof of that is there is so little reporting on those improvements. We’re going to continue at it. We’re not there yet. The deadline is March 31. We look forward to seeing increases in enrollments, including young Americans.”
Risk corridors, part of the Affordable Care Act, is designed as a rescue mechanism for insurers by picking up 80 percent of the claims between $45,000 and $250,000.
The conservative American Action Forum released a study this week that stated that despite the tax penalties for not buying insurance, it would still be cheaper for 86 percent of young adults to forgot the individual mandate in 2014. In 2015 the fine increases but it would still be cheaper for 71 percent of young people to pay than buy an government-approved insurance plan on the health care exchange. By 2016, it would still be chaper for 62 percent to pay the fine than buy insurance on the exchange.
The administration is trying to backtrack on its higher expectations, said Chris Holt, director of health care policy at the American Action Forum.
“Young adults make up 24 percent of enrollees through December, but account for roughly 39 percent, of the uninsured population,” Holt told TheBlaze in a statement.
“The administration by their own admission believe they need 39 percent of enrollees to be young adults – though in the face of low enrollment they have started trying to walk that back. They are short of where they need to be. Our recent study shows that there is little financial incentive for young adults to join the exchanges and that is being reflected in enrollment thus far.”
Watch the video below (TheBlaze’s question comes in at 39:22):
This story has been updated.
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