It’s unclear whether the new outreach will overcome the continuing concern among the uninsured about the affordability of ACA marketplace plans.


June 22—The Obama administration has enlisted the IRS in its latest push to increase the share of young adults in government-run marketplace health plans.

The share of Affordable Care Act (ACA) marketplace enrollees who are in the coveted 18- to 34-year-old age range has stayed stuck at 28 percent of enrollees since the marketplaces launched in 2014, according to a report from the U.S. Department of Health and Human Services (HHS). The share is far below the 40 to 45 percent range that actuaries say is needed for a healthy insurance market.

The latest enrollment push will direct the IRS to send letters to those who were fined under the ACA’s individual mandate or who claimed an exemption, informing them of the available financial assistance for healthcare coverage. In 2014, 7.9 million filers paid the tax penalty and “millions more” claimed an exemption, according to HHS.

“These are new ways to directly reach millions of people who were recently uninsured,” HHS Secretary Sylvia Mathews Burwell said during a media call.

Other components of the initiative include encouraging employers and health plans to inform young adults aging out of their parents’ coverage about their options in the ACA marketplaces. Uninsured rates among young invincibles increase four percentage points when they turn 26 and lose the ability to enroll in their parents’ plans, according to HHS.

States also will be encouraged to support transitions to marketplace plans by enrollees in Medicaid and the Children’s Health Insurance Program who no longer qualify for those programs.

The stepped-up enrollment outreach to young adults also includes working with partners to promote enrollment tools and information. As part of the initiative, the American Hospital Association (AHA) plans to develop a social media toolkit to help hospitals reach and educate young adults about the marketplaces and how to enroll and get assistance with coverage. AHA also plans to promote hospital incorporation of existing digital enrollment tools, such as the Get Covered Connector, onto their websites to direct hospital website traffic to enrollment assistance; and to develop messaging and materials for hospitals to use about the importance of maintaining and renewing coverage.

A core of the stepped-up digital outreach to Millennials, according to Burwell, is a plan for repeated and carefully timed emails to prospective enrollees, including those who have selected a plan but not paid to activate coverage.

“Last year we learned that young adults are twice as likely to enroll after receiving an email than older customers,” Burwell said.

The Obama administration also is betting a rising ACA individual mandate penalty will spur more young adults to sign up. ACA penalties increased from $95 in 2014 to $695 or 2.5 percent of household income, whichever is higher, in 2016.

“We don’t think that we’ve seen the full effect of the penalty yet,” Christen Linke Young, principal deputy director for the Center for Consumer Information and Insurance Oversight at the Centers for Medicare & Medicaid Services, told reporters.

Effectiveness Questioned

Some industry observers wondered why the latest campaign will be any more successful than previous efforts. The Obama administration launched a similarly focused campaign at the same time last year.

Brian Blase, a senior research fellow at the Mercatus Center at George Mason University, noted in an interview that when the individual mandate penalty previously doubled, no increase in the share of enrollments by young adults followed.

“They’re unlikely to get a higher percentage of young adult enrollees next year than they did this year,” Blase said about the administration initiatives.

The latest push to increase the share of young adults came as many insurers are proposing substantially larger premium increases in 2017 compared with the previous two years, the ACA-backing Kaiser Family Foundation reported on June 15.

“We know this is probably going to be the largest premium increase that we have seen so far, and the people less sensitive to those premium increases are lower-income individuals who are subsidized and individuals who are sick and really need the insurance,” Blase said, referring to overrepresented groups of enrollees.

Even when rates were lower in 2015, affordability issues were named by 61 percent of the uninsured in a Robert Wood Johnson survey as a reason why they had not signed up for coverage.

“It was sold as a benefit for the middle class,” Blase said. “Well, the middle class is not enrolling in the exchanges; it is mostly people just above the poverty line who qualify for really large subsidies.”

Multiple Approaches

The campaign to increase enrollments by young invincibles was the latest of three initiatives in recent weeks aimed at bolstering the marketplaces and reassuring participating insurers. A lack of healthy young-adult enrollees has been blamed for the proposed spike in 2017 premiums, which aim to stem the ongoing steep losses most insurers have seen in their ACA plans.

“When I look at the problems of the risk pool, they almost all go back to an insufficient number of Millennials, and that has led to higher costs, it has led to market exit, and it has led to higher premiums,” Jon Gabel, a senior fellow for NORC at the University of Chicago, said during a recent forum on the marketplaces. “And so we need to enroll more Millennials.”

Other recent efforts aimed at bolstering the marketplaces included proposed regulations, issued in early June, that aimed to limit cheaper but less-robust coverage options that the administration blamed for pulling young adults away from the ACA marketplaces.

That followed a May initiative to reduce the number of special enrollment periods (SEPs) in the ACA marketplaces outside of the annual open enrollment periods. Insurers had worried that one of those SEPs—allowed in cases of a “permanent move”—was being abused by highly mobile lower-income enrollees to access insurance coverage only as long as needed to obtain costly services. Insurers had urged the change.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C. office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Wednesday, June 22, 2016