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.
What We're Following See More »
The White House on Wednesday laid out its plan for tax reform, with Treasury Secretary Steven Mnuchin saying it would be "the biggest tax cut and the largest tax reform in the history of our country." The tax code would be broken down into just three tax brackets, with the highest personal income tax rate cut from 39.6 percent to 35 percent. The plan would also slash the tax rate on corporations and small businesses from 35 percent to 15 percent. "The White House plan is a set of principles with few details, but it’s designed to be the starting point of a major push to urge Congress to pass a comprehensive tax reform package this year," said National Economic Council Director Gary Cohn.
"An emerging government funding deal would see Democrats agree to $15 billion in additional military funding in exchange for the GOP agreeing to fund healthcare subsidies, according to two congressional officials briefed on the talks. Facing a Friday deadline to pass a spending bill and avert a shutdown, Democrats are willing to go halfway to President Trump’s initial request of $30 billion in supplemental military funding."
The Michael Flynn story is not going away for the White House as it tries to refocus its attention. The White House has denied requests from the House Oversight Committee for information and documents regarding payments that the former national security adviser received from Russian state television station RT and Russian firms. House Oversight Chairman Jason Chaffetz and ranking member Elijah Cummings also said that Flynn failed to report these payments on his security clearance application. White House legislative director Marc Short argued that the documents requested are either not in the possession of the White House or contain sensitive information he believes is not applicable to the committee's stated investigation.
The U.S. deployed "F-35 joint strike fighters" to Estonia on Tuesday. The "jets will stay in Estonia for several weeks and will be a part of training flights with U.S. and other NATO air forces." The move comes at a time of high tension between the U.S. and Estonia's neighbor, Russia. The two nations have been at odds over a number of issues recently, most of all being Vladimir Putin's support of Syrian President Bashar al-Assad in light of Assad's chemical weapons attack on his own people in the midst of a civil war.