White House Moves Obamacare Goalposts Again

Another day, another self-imposed standard gets watered down.

President Barack Obama speaks at Temple Emanu-El November 6, 2013 in Dallas, Texas.
National Journal
Sam Baker
Jan. 14, 2014, 5:10 p.m.

The White House is scal­ing back an­oth­er self-im­posed stand­ard for Obama­care’s suc­cess — and it’s one the ad­min­is­tra­tion has spent months pro­mot­ing.

White House of­fi­cials con­sist­ently — and ac­cur­ately — ar­gue that the most im­port­ant met­ric for Obama­care’s suc­cess this year is the mix of young and old en­rollees. But they’re back­ing away from their own goals for that mix.

Get­ting young people in­to the sys­tem is crit­ic­al to hold­ing down premi­ums, and there­fore to keep­ing each state’s in­sur­ance mar­ket stable. Ad­min­is­tra­tion of­fi­cials pre­vi­ously said their tar­get was for young adults to make up about 38 per­cent of Obama­care en­rollees. Now that stand­ard is down to about 30 per­cent. Or maybe even 24 per­cent — where the mix stands now.

It was the White House that set the ini­tial tar­get of 38 per­cent en­roll­ment for young adults. But of­fi­cials wouldn’t stand by that fig­ure this week.

The Health and Hu­man Ser­vices De­part­ment re­leased its first age break­down on Monday, show­ing that about 24 per­cent of Obama­care en­rollees are between 18 and 34. Of­fi­cials from HHS and the White House her­al­ded the fig­ure as a suc­cess be­cause it makes an in­sur­ance “death spir­al” — Obama­care’s worst-case scen­ario — ap­pear all but im­possible.

The ad­min­is­tra­tion may well hit its ini­tial 38 per­cent tar­get, but it’s ap­par­ently abandon­ing that goal pree­mpt­ively, de­clar­ing suc­cess just by avoid­ing the worst pos­sible out­come.

“We are already at that stage of pre­lim­in­ary sus­tain­ab­il­ity with three months left to go,” an ad­min­is­tra­tion of­fi­cial said.

The thing is, that’s prob­ably true. Young-adult en­roll­ment looks OK. It was nev­er ex­pec­ted to hit its fi­nal tar­get at this stage; young people will likely sign up at the last minute, and the fi­nal dead­line to en­roll isn’t un­til March.

Pro­jec­tions from the Kais­er Fam­ily Found­a­tion show that the health care law’s new in­sur­ance mar­kets could be vi­able with young-adult en­roll­ment as low as 25 per­cent — the bar the White House has already cleared. When Mas­sachu­setts im­ple­men­ted the first draft of Obama­care in 2006, its mar­ket­place proved sus­tain­able with 30 per­cent en­roll­ment among young adults.

But, once again, ad­min­is­tra­tion of­fi­cials are lower­ing their own stand­ards for suc­cess — ditch­ing tar­gets they set or em­braced, and re­de­fin­ing suc­cess as any­thing that’s good enough to avoid a total col­lapse. It was the White House that set the ini­tial tar­get of 38 per­cent en­roll­ment for young adults. But of­fi­cials wouldn’t stand by that fig­ure this week.

“There’s a dif­fer­ence between that num­ber and what’s re­quired for a sus­tain­able mar­ket,” the seni­or ad­min­is­tra­tion of­fi­cial said.

The White House has already dis­avowed its self-iden­ti­fied “tar­get” for over­all en­roll­ment: 7 mil­lion people in the first year. In down­play­ing that num­ber, the White House and HHS have ar­gued that the age mix is more im­port­ant than over­all en­roll­ment — which it is, from a policy per­spect­ive.

But just as of­fi­cials haven’t re­leased a new tar­get for over­all en­roll­ment, they’re also lower­ing ex­pect­a­tions for the mix of old and young en­rollees. The White House said Monday that it had cleared the first bar — a good enough mix for a sus­tain­able mar­ket. Is there an­oth­er goal, more am­bi­tious than avoid­ing dis­aster?

“From now on, the ul­ti­mate goal is to get as many people in­sured as pos­sible,” the ad­min­is­tra­tion of­fi­cial told re­port­ers.

HHS of­fi­cials also would not com­mit to the ad­min­is­tra­tion’s earli­er goals for young-adult en­roll­ment. The num­ber had been “over­blown” as a make-or-break fig­ure, one HHS of­fi­cial said.

A mix that’s good enough to avoid a “death spir­al” could still af­fect in­sur­ance premi­ums next year. The sick­er the over­all mar­ket­place is, the more premi­ums are likely to rise.

(In this con­text, “young people” are a proxy for “healthy people.” Health status is what af­fects premi­ums, not age. But be­cause in­surers are no longer al­lowed to vary their premi­ums based on preex­ist­ing con­di­tions, the ap­plic­a­tion for cov­er­age doesn’t ask about health prob­lems. Young people are pre­sumed to be health­i­er on av­er­age, and that’s why they’re so highly coveted.)

A mix of roughly 25 per­cent young adults would cause in­surers to raise their premi­ums, Kais­er pre­dicted, but not enough to cause a “death spir­al.” Kais­er said the new in­sur­ance mar­ket­places would re­main vi­able even in that “worst-case scen­ario,” al­though premi­ums would be less likely to rise with more young people in the mix.

In­surers are already con­cerned, however, that this year’s en­roll­ment pool might not be as healthy as they pro­jec­ted. The tech­nic­al prob­lems with Health­Care.gov de­pressed over­all en­roll­ment, and ex­ec­ut­ives from Hu­mana have also said Pres­id­ent Obama’s de­cision to help un-can­cel cer­tain in­sur­ance policies has also kept healthy people out of the mar­ket.

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