Study: Insurance Market 'Death Spiral' Unlikely

Pushing back against those who warn that low numbers of younger subscribers in new insurance marketplaces could lead to a spiral of higher premiums and falling enrollments, Kaiser Family Foundation analysts say the signup of young adults "is not as important as conventional wisdom suggests."

The Washington Post’s Wonk Blog: Why Obamacare Won’t Spiral Into Fiery, Actuarial Doom
The rumors of an Obamacare death spiral have been greatly exaggerated. So say Larry Levitt, Gary Claxton and Anthony Damico, experts at the Kaiser Family Foundation who have put together a new brief analyzing what would happen if young adults snubbed the Affordable Care Act. Even if young people sign up at half the rate the administration hopes for, it would nudge premiums up only by a few percentage points, their report says (Kliff, 12/17). 

Kaiser Health News: Capsules: Study: It’s All Healthy People — Not Just Young Adults — Who Are Critical To ACA Success
Pushing back against those who warn that low levels of younger subscribers could threaten coverage sold under the health law, analysts for the Kaiser Family Foundation say enrollment of young adults 'is not as important as conventional wisdom suggests.' Even if insurance pools contain only 25 percent young adults rather than the hoped-for 40 percent, medical claims and other costs would exceed premium revenue by only about 2.4 percent, they estimate. That’s far below the kind of loss that would lead to an unsustainable spiral of huge premium increases and fewer and fewer subscribers, they say (Hancock, 12/17).

Reuters: Obamacare Death Spiral Looks Unlikely: Study
A threat to America's health insurance overhaul has been that young people would not buy coverage in new marketplaces, possibly pushing the program into a disastrous spiral of falling enrollment and rising premiums. But this worst-case scenario is looking more far-fetched, according to a study by the Kaiser Family Foundation, which sees just slight increases in premiums in 2015 even though enrollment of younger people so far is well below the Obama administration's target (Lange, 12/17).

CQ HealthBeat: Fears About Insurance Market ‘Death Spiral’ Overblown, Kaiser Analysis Suggests
Insurers are likely to eke out small profit margins even if fewer young adults enroll in health exchanges than the administration is targeting, according to a new analysis by the nonpartisan Kaiser Family Foundation. The report suggests that the online marketplaces will be viable even if young adults enroll at a 50 percent lower rate than older people (Adams, 12/17).

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