Bob Laszewski: The demographic mix in some ObamaCare risk pools right now is “very, very bad”

posted at 6:01 pm on December 11, 2013 by Allahpundit

I wish he had been more specific about what “very, very bad” means and how many plans are in trouble because of this, but his previous criticisms of O-Care and Healthcare.gov have been accurate so there’s little reason to doubt that this one is too. On the contrary, this is consistent with the dog that didn’t bark in the HHS enrollment data released this morning. If the composition of the risk pools looked good, with oodles of “young invincibles” signing up to subsidize people with preexisting conditions, Obama and Sebelius would be shouting it from the mountaintops. The progressive goalposts, always capable of quickly shifting, would move instantly from “how many people have signed up?” to “how’s the demographic mix of the risk pools?”. That’s what’s really important, don’tcha know.

The answer to each question in turn: Not enough people have signed up, and per Laszewski, not enough of the ones who have are the healthy youngsters insurers desperately need.

Older clients, aged above 40, comprise 60 percent of the new Obamacare customers at one of his client health-care companies, Laszewski told The Daily Caller.

The skew is “very, very bad,” said Laszewski, who is president of Health Policy and Strategy Associates, Inc…

Precise predictions are impossible because the Obamacare system is so new, and executives do expect a surge of people to join in the next two weeks, Laszewski said.

But the apparent lack of young people “is a very poor omen,” Laszewski said.

Not the first time we’ve heard that the risk pools are older and grayer than HHS hoped. The October data for some plans showed the average age of enrollees climbing above 50. In Connecticut and Kentucky, the biggest segment of enrollees came from the 55+ group; in California, which operates the largest state exchange, 56 percent of October enrollees were older than 45 and, of that group, a majority were over age 55. Just 23 percent came from the coveted 18-34 demographic. But all of that was expected: It stands to reason that the first rush of sign-ups after the exchanges launched would come from older, sicker people who are desperate to get coverage. The significance of Laszewski’s comments today is that he seems to believe that the skew has persisted, at least in some segments, well into December. Again, though, I wish he’d given us numbers. According to HHS, the exchanges will be fine if 40 percent of enrollees are young and healthy. Laszewski told the Daily Caller that 60 percent of new enrollees in some plans are older than 40. That … doesn’t sound terribly skewed, frankly. And since it’s the lazy and/or distracted youngsters who are expected to finally sign up in the last enrollment crunch before Christmas, there’s reason to think that the risk pools might be even more balanced by New Year’s. It would, presumably, be very easy for HHS to clue us in on all this, but as I say, they’re keeping their mouths shut. Which almost certainly means it’s bad news, i.e. Laszewski’s right.

It’s not just the age mix that’s confounded predictions. Patrick Brennan notes a curious trend in the HHS data released today:

About one-fourth of the people who have entered their income information on their applications were deemed eligible for subsidies on the exchanges (about 900,000 out of about 3.6 million), which is lower than the number we saw in October alone and remains really far from what was projected. The CBO projected that just 1 million out of the 7 million people to enroll in the exchanges in the first year would be ineligible for subsidies, so the ratio is way off from what was expected (15–75 vs. 75–25). I had some thoughts on that surprising fact a month ago, and I’ll add a couple now: Unsubsidized customers (basically, those above the national median income) are generally savvier and more likely to have the resources to enroll and make their payments ahead of time, so maybe this is understandable and doesn’t say anything about who will eventually enroll. On the other hand, it may demonstrate that the people to whom insurance was supposed to be expanded — the uninsured, who tend to be low-income and not well educated — aren’t getting to the exchanges at all, and covering them will be a much longer term project.

CBO made a rational assumption: If you expand coverage to people irrespective of preexisting conditions and subsidize those with smaller incomes to make their premiums more affordable, it stands to reason that lower-income people who’d been priced out before will leap at the chance to buy insurance once it’s available in October. Right? They’re the “winners” from the law. Uncle Sam’s helping them out with a little welfare towards their health insurance. Why not avail themselves? What we’re seeing instead is higher-income people who don’t qualify for subsidies enrolling. Maybe that’s because they, more so than lower-income folks, used to have insurance and were recently canceled, making them desperate to get new coverage before January 1st. If you’re poor and have spent years without insurance, you might be so used to it that you don’t bother to hurry when the exchanges open. Or maybe the premiums are so high even after you discount them for subsidies that some poorer consumers still can’t afford them and are holding out for the time being. Or maybe the subsidy problem is a function of the poor demographic mix right now: The “young invincibles” who are just starting out in the labor market (if they’re lucky enough to find a job) are, I’d guess, way more likely than older middle-class people to need a little help paying their premiums. If they’re not signing up yet, then naturally the risk pool will be older and wealthier. Good news for taxpayers at the moment, in that the subsidies are flowing relatively slowly from the tap, but bad news later if the skewed risk pool persists and HHS has to bail out insurers from their adverse selection problem.

Anyway. Senate Democrats have decided that Obama’s fixes to the law aren’t nearly enough and so they’re working on their own fixes, pretty much of all which will only make the adverse selection problem worse and a bailout more likely. They’re the Smart Party, remember.


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. If the composition of the risk pools looked good, with oodles of “young invincibles” signing up to subsidize people with preexisting conditions, Obama and Sebelius would be shouting it from the mountaintops

The “young invicibles” won’t be signing up because they are being carried by their parents!!

ladyingray on December 11, 2013 at 6:05 PM

No way!

bazil9 on December 11, 2013 at 6:07 PM

or… maybe the deductibles and copays are so high that lower income people can’t afford to pay them, so the insurance doesn’t do them any good anyway.

topdog on December 11, 2013 at 6:09 PM

Or they’re all getting on medicaid…

Vera on December 11, 2013 at 6:11 PM

They will just up the penalties for not signing up….maybe take away driver’s licenses….no student loans for students not signing up for ObamaCare…denying entry to colleges that receive federal money…threatening draft into the military…

albill on December 11, 2013 at 6:12 PM

They won’t sign up until pot is added as a subsidized “medicine”.

HotAirian on December 11, 2013 at 6:16 PM

And in other news, the President has agreed to become a customer spokesman for Depends. The product has been a big help to him lately.

MTF on December 11, 2013 at 6:19 PM

You know what the real risk is, that this clusterfark of a program has become law in the first place.

Thomas More on December 11, 2013 at 6:21 PM

Santa Claus wouldn’t do that! /s

RovesChins on December 11, 2013 at 6:22 PM

Santa Claus wouldn’t do that! /s

RovesChins on December 11, 2013 at 6:22 PM

Santa Penguin would.

bazil9 on December 11, 2013 at 6:24 PM

Why would anyone sign up until they need the coverage? Ideally, the hospital will sign you up as you lie on the emergency room bed. Heck, the hospitals will even pay the premium.

MTF on December 11, 2013 at 6:24 PM

It has been said there are those who watch auto racing just to see the crashes. That’s kinda how I feel about Obamacare. The news on Obamacare is one pile up after another but for some reason despite its ugliness I just can’t turn away.

DaveDief on December 11, 2013 at 6:24 PM

I’m shocked, shocked to find that only sick people are signing up for ObamaCare!

BobMbx on December 11, 2013 at 6:26 PM

We rehired the amateur former community organizer?

CWchangedhisNicagain on December 11, 2013 at 6:27 PM

Older clients, aged above 40, comprise 60 percent of the new Obamacare customers…

THIS QUOTE COMPRISES BAD GRAMMAR

3.14159 on December 11, 2013 at 6:28 PM

Santa Claus wouldn’t do that! /s

RovesChins on December 11, 2013 at 6:22 PM

Santa Penguin would.

bazil9 on December 11, 2013 at 6:24 PM

Racist!

RovesChins on December 11, 2013 at 6:28 PM

Not only the smart party but the Transparency Party too, transparent as lead.

Bishop on December 11, 2013 at 6:29 PM

Not enough people have signed up, and per Laszewski, not enough of the ones who have are the healthy youngsters insurers desperately need.

Kirk could handle this:

Scotty…I’m gonna need maximum risk corridors as soon as you can get it!

BobMbx on December 11, 2013 at 6:29 PM

bazil9 on December 11, 2013 at 6:24 PM
Racist!

RovesChins on December 11, 2013 at 6:28 PM

So, I have been told. ;)

bazil9 on December 11, 2013 at 6:31 PM

In insurance it’s called adverse selection.

This is a textbook case on the worst case scenario.

Without government bailout of the insurance companies they’d already be sending non-renewal notices for these policies effective 1/1/2015.

acyl72 on December 11, 2013 at 6:33 PM

Kirk could handle this:

BobMbx on December 11, 2013 at 6:29 PM

Kirk wouldn’t have gotten into this mess. Not even for the hottest Orion slave girl piece of tail in the galaxy.

bazil9 on December 11, 2013 at 6:31 PM

Over and over you racist.

cozmo on December 11, 2013 at 6:34 PM

Senate Democrats have decided that Obama’s fixes to the law aren’t nearly enough and so they’re working on their own fixes, pretty much of all which will only make the adverse selection problem worse and a bailout more likely. They’re the Smart Party, remember.

I thought Obamacare was the law of the land and perfect. Why would we want to change it. This was the mantra of Democrats during the government shutdown.

Happy Nomad on December 11, 2013 at 6:34 PM

bazil9 on December 11, 2013 at 6:24 PM
Racist!

RovesChins on December 11, 2013 at 6:28 PM

So, I have been told. ;)

bazil9 on December 11, 2013 at 6:31 PM

Me too. I think it means conservative.

RovesChins on December 11, 2013 at 6:35 PM

It all looked so good when we didn’t read it.

jukin3 on December 11, 2013 at 6:37 PM

Kirk could handle this:

Scotty…I’m gonna need maximum risk corridors as soon as you can get it!

BobMbx on December 11, 2013 at 6:29 PM

Kirk would be too busy dealing with Spock. Half human or not something as illogical as Obamacare would leave Spock huddled in the fetal position muttering something about the the math not adding up.

Happy Nomad on December 11, 2013 at 6:37 PM

I agree with B9 about the penguin.

SparkPlug on December 11, 2013 at 6:38 PM

I don’t agree with cozmo about the over and over.

SparkPlug on December 11, 2013 at 6:39 PM

Could one even imagine how screwed up this would be if we DIDN’T have the world’s smartest man in history leading the way?

jukin3 on December 11, 2013 at 6:39 PM

His lips are purple because he lies.

Obama is his name.
ObamaCare debacle is his legacy.

SparkPlug on December 11, 2013 at 6:41 PM

I agree with B9 about the penguin.

SparkPlug on December 11, 2013 at 6:38 PM

Why do you and B9 hate penguins?

RovesChins on December 11, 2013 at 6:42 PM

Happy Nomad on December 11, 2013 at 6:37 PM

Spock: “Captain, the odds of ObamaCare succeeding are 1 in 350,998,837.2″

Kirk: “.2?”

Spock: “I do endeavor to be accurate”

BobMbx on December 11, 2013 at 6:43 PM

Why are these brown people such a disappointment to us? We gave them everything, and look they can’t do it right, they f—- it up?

rogerb on December 11, 2013 at 6:44 PM

I don’t know how they could possibly have made this a bigger failure than it is. This is what you get when you get a bunch of bloated puffy lawmakers and put them in charge of something as big as health care. The only people who didn’t predict this would be a disaster are the democrats and now they’ve exposed their party as profligate, ignorant, incompetent lumps that we all knew they were. No one on the planet has probably ever paid almost (or over, who really knows) $400 million for a dysfunctional website.

scalleywag on December 11, 2013 at 6:45 PM

OT: Wonder why AmnestyAir hasn’t discussed the latest Rasmussen poll?

Majority of Americans Believe Deportation Not Aggressive Enough…

Sixty percent (60%) believe the U.S. government is not aggressive enough now in deporting illegal immigrants. Fourteen percent (14%) say it is too aggressive, while 16% think the number of deportations is about right.

xblade on December 11, 2013 at 6:46 PM

bazil9 on December 11, 2013 at 6:24 PM
Racist!

RovesChins on December 11, 2013 at 6:28 PM

So, I have been told. ;)

bazil9 on December 11, 2013 at 6:31 PM

Me too. I think it means conservative.

RovesChins on December 11, 2013 at 6:35 PM

I thought it meant “old white guy,”

davidk on December 11, 2013 at 6:49 PM

Hey libs and democrats……. own it you idiots.

ultracon on December 11, 2013 at 6:50 PM

Why don’t we just can ObamaCare, then draft “the uninsured, who tend to be low-income and not well educated”. Kill three birds with one stone. We can call it “The Obama Corps”. They can do “the jobs Americans won’t do”.

They get a job. They get health care. Illegals get thrown out of the work force and go back home.

Sounds like a win-win on several fronts.

GarandFan on December 11, 2013 at 6:51 PM

Why are these brown people such a disappointment to us? We gave them everything, and look they can’t do it right, they f—- it up?

rogerb on December 11, 2013 at 6:44 PM

Waait for it …

davidk on December 11, 2013 at 6:51 PM

The CBO projected that just 1 million out of the 7 million people to enroll in the exchanges in the first year would be ineligible for subsidies, so the ratio is way off from what was expected (15–75 vs. 75–25).

Well, Podesta has been brought in to r@pe the constitution. For his next act, Santa Claus will give the unwashed horde subsidies for one year.
All by executive fiat. Because HE cares.

RovesChins on December 11, 2013 at 6:55 PM

bazil9 on December 11, 2013 at 6:24 PM
Racist!
RovesChins on December 11, 2013 at 6:28 PM

So, I have been told. ;)

bazil9 on December 11, 2013 at 6:31 PM

Me too. I think it means conservative.

RovesChins on December 11, 2013 at 6:35 PM

I thought it meant “old white guy,”

davidk on December 11, 2013 at 6:49 PM

That’s a given. Don’t you know we’re ALL old, white men.

RovesChins on December 11, 2013 at 6:56 PM

And since it’s the lazy and/or distracted youngsters who are expected to finally sign up in the last enrollment crunch before Christmas

This I really, really sort of kinda doubt, you know? They’ll be too busy going to parties or shopping.

The ones sweating it out are those who either have or their family members some kind of chronic or acute health problem that needs ongoing treatment.

The Dems have instigated misery and tragedy. They are cold and without compassion. People are mere props to them.

INC on December 11, 2013 at 6:57 PM

Single-payer on its way.

Philly on December 11, 2013 at 6:57 PM

No whining… own it dems

Gop do not have to help you out this boondoggle….. its on you

cmsinaz on December 11, 2013 at 7:13 PM

No matter how much the politicians want it not to be true, the laws of economics and human nature are inviolable.

Secondly, tossing money at problems only delay the effects of the problems, it never fixes the problem…and eventually one runs out of money to toss because each one is more expensive than the last.

Finally, the most open, ethical, and transparent Administration ever knows the demographics and information. The reason they are not releasing this information is entirely based on the politics and the optics. The longer they can keep the clusterfark from being seen as a massive clusterfark, the closer they are to the only option remaining available (to them) is single payer.

Athos on December 11, 2013 at 7:19 PM

“If you’re poor and have spent years without insurance, you might be so used to it that you don’t bother to hurry when the exchanges open.”

It’s far more likely these people simply don’t have a spare $500 or so lying around for OC.

Doesn’t matter if the POS is offering subsidies when you still have to come up with hundreds of extra dollars monthly you don’t have.

And we KNOW college students and most 20-somethings don’t have any extra cash.

wyntre9 on December 11, 2013 at 7:24 PM

Shocking.

munseym on December 11, 2013 at 7:41 PM

“Some” and “Very, very Bad”

You can appear somewhat concerned, yet not actively stating the obvious and dumping on President Boyfriend Care.

Then, when it all hits the fan:

“See!!! I told ya so!!”

BigWyo on December 11, 2013 at 7:42 PM

And we KNOW college students and most 20-somethings don’t have any extra cash.

wyntre9 on December 11, 2013 at 7:24 PM

How long before we start seeing Pell Grants and clauses in student loans for it???

The government does control all of that.

BigWyo on December 11, 2013 at 7:44 PM

Older, sicker, wealthier. In other words, people with pre-existing conditions who have assets they want to protect but not so much wealth they can self-insure.

Given the outrageous premiums and deductibles, the people most attracted to the exchanges will be those who think they will save money despite the large out-of-pocket expenses. If you’re in your 20′s, healthy, and have no significant assets, why would you want to pay exorbitant fees for something you’ll almost certainly not use? And in the unlikely event the worst comes, the government says hospitals have to treat you regardless of your ability to pay, and you can always declare bankruptcy since you have almost nothing to lose anyway.

CJ on December 11, 2013 at 7:49 PM

David Burge ‏@iowahawkblog 1h

Shocker: Millennials not racing to pay $2500/year for prostate insurance with $10k deductibles http://hotair.com/archives/2013/12/11/bob-laszewski-the-demographic-mix-in-some-obamacare-risk-pools-right-now-is-very-very-bad/

(Hint: don’t bother clicking on Burge’s link.)

davidk on December 11, 2013 at 7:50 PM

I’m shocked, shocked to find that only sick people are signing up for ObamaCare!

BobMbx on December 11, 2013 at 6:26 PM

The sick and the stupid.

VorDaj on December 11, 2013 at 7:55 PM

For the record – Late 30s or early 40s is the average age they are looking for.

ArkyDore on December 11, 2013 at 7:57 PM

Obama, Mengela’s Spawn, through your arrogance, heartlessness and stupidity, you have opened this formally blessed land and millions of innocent lives to the horror and devastation of ObamaCare…

VorDaj on December 11, 2013 at 8:01 PM

Allahpundit, good stuff, but could you give us overtaxed readers a little breathing room ? Like just one or two paragraph breaks ???

My eyes glaze over when I see all this jumble, especially when I’m at work !

Not the first time we’ve heard that the risk pools are older and grayer than HHS hoped. The October data for some plans showed the average age of enrollees climbing above 50. In Connecticut and Kentucky, the biggest segment of enrollees came from the 55+ group; in California, which operates the largest state exchange, 56 percent of October enrollees were older than 45 and, of that group, a majority were over age 55. Just 23 percent came from the coveted 18-34 demographic. But all of that was expected: It stands to reason that the first rush of sign-ups after the exchanges launched would come from older, sicker people who are desperate to get coverage. The significance of Laszewski’s comments today is that he seems to believe that the skew has persisted, at least in some segments, well into December. Again, though, I wish he’d given us numbers. According to HHS, the exchanges will be fine if 40 percent of enrollees are young and healthy. Laszewski told the Daily Caller that 60 percent of new enrollees in some plans are older than 40. That … doesn’t sound terribly skewed, frankly. And since it’s the lazy and/or distracted youngsters who are expected to finally sign up in the last enrollment crunch before Christmas, there’s reason to think that the risk pools might be even more balanced by New Year’s. It would, presumably, be very easy for HHS to clue us in on all this, but as I say, they’re keeping their mouths shut. Which almost certainly means it’s bad news, i.e. Laszewski’s right.

When what I really need to know – and is usually in the comments, so I just skip to them.

We’re screwed

- and then I can just absorb that and get back to work !

williampeck1958 on December 11, 2013 at 8:14 PM

the uninsured, who tend to be low-income and not well educated — aren’t getting to the exchanges at all

I’m not so sure of this, at least not for all.
Many may well have figured out that penalty + medical costs is less than premium + deductible, even with the money from heaven helping out with the premium. I bet I didn’t see a doctor a dozen times between the age of 18 and 30. That’s once a year, and that was not for “checkups”, which means the $$ would come out of my pocket today anyway.

JusDreamin on December 11, 2013 at 8:52 PM

Price has an alternative plan that should serve as a starting point for what needs to replace this turkey. It’s not enough now to repeal ObamaCare, it’s way too late for that. It’s wrecking health care coverage in this country and we cannot repair what’s been broken.

Portability, ownership, interstate competition, tax credits for the poor to buy their own, and taxing employer-provided plans as ordinary income (which it is) should be on the table, as well as extended eligibility for medical savings accounts (with tax preferences).

Adjoran on December 11, 2013 at 8:57 PM

…Smart Power!

KOOLAID2 on December 11, 2013 at 10:15 PM

Low – information, low-income people are looking for free health insurance, not cheap health insurance. They’ve gotten along without insurance for years so why go out of their way to pay more in premiums? Whatever they were doing (going to emergency rooms, getting on Medicaid) was working for them, in the main, so why pay money for a high deductible health plan?

Fred 2 on December 12, 2013 at 12:20 AM

The IRS knows who the low income and uneducated are. Why can’t they just send them their free policy along with one of their checks and snap cards every Dec. This would eliminate trying to use the stupid website and the poor would be covered which was the expressed point of this exercise from the beginning. The rest of us could have been left alone.

Kissmygrits on December 12, 2013 at 8:45 AM

Poor people wont sign up unless it’s absolutely free OR it saves them money in some form or fashion. By which I mean allows them to pay less than they already are. If you give them healthcare for 50 bucks a month, but they dont use any healthcare, or only use “free” care like emergency rooms, they wont buy insurance.

Dash on December 12, 2013 at 8:56 AM

I never thought the “death spiral” would start this early. Good.

dominigan on December 12, 2013 at 10:17 AM

Just wondering for no specific reason:
Did they implement [Ctrl]-Z for ObamaCare?

Tsar of Earth on December 12, 2013 at 12:24 PM