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Humana ACA Enrollees Younger Than Expected

By Jay Hancock

February 5th, 2014, 3:54 PM

Here’s more fodder for the debate over whether older, sicker members will swamp insurance plans created by the Affordable Care Act.

Insurers have wondered whether enough younger, healthier “invincibles” would sign up through online exchanges to subsidize folks with poorer health. The worry was that, without their premiums, expenses for older folks would drive up average costs and make plans less affordable.

Some have argued that an invincible gap might not be fatal thanks to the higher premiums paid by older members and, in the early years, the ACA’s financial safety netfor insurers. Now there’s evidence that, while far from conclusive, suggests young people may be initially joining in greater numbers than some insurers expected.

Source: Humana (based on Humana internal sales reports)

“While still early, as we analyze the demographics of our exchange membership, we are seeing enrollees skewing a bit more to the younger side,” Humana CEO Bruce Broussard told stock analysts on a Wednesday conference call.

About 35 percent of those who enrolled by the end of January were between 21 and 40, Humana said. That’s still below the portion of consumers that age in the general population.

About 82 percent of Humana’s new members are getting federal tax credits to help pay the premiums, Broussard said — many of them probably younger and with lower incomes.

More than 200,000 people had applied to Humana plans offered through the exchanges by the end of January, the company said.

The proportion of Humana’s younger exchange applicants has been slightly rising with time, bolstering arguments that younger consumers would wait to sign up until software in the online marketplaces was working well.

Last week WellPoint reported it had received about 500,000 applications for individual policies sold through the exchanges. Members were generally older than the general population, but not more than expected, WellPoint said.

5 Responses to “Humana ACA Enrollees Younger Than Expected”

  1. Edward H. says:

    Great news for Humana. One would assume that this will translate into lower loss ratios…and possibly lower rates.

    Already, in many Midwestern states (such as Ohio), Humana’s prices are very competitive.

  2. Ray says:

    Humana’s competitive rates, and the proven price sensitivity of younger demographics, likely has a significant contribution to their population skewing young compared to general Exchange business.

    It looks good for them, but certainly doesn’t extrapolate out to other carriers, or the marketplace in general.

    Don’t forget, it can also easily be attributed to all of the 0-26 year old “children” enrolled on their family plans. A mom with 5 kids is still 5 kids enrolling. That’s not the young people the want on the plan, they want healthy individuals paying a full individual premium (and not using it, people in this demographic pay 5-7x more than they claim on average). 5 kids and an adult covered under a plan that is just 1.7x the individual premium is not going to pad their reserves, quite the opposite.

  3. Mike Wall says:

    Success for ACA, and therefore our citizens, depends on the spread of risk, including the “invincibles”. The expectations are that the closer we get to the deadline, the more young people will enroll.
    Let’s hope this is true.

  4. Steve S says:

    I’ve always viewed Humana as “young people friendly.” Nothing scientific but that’s the image they’ve portrayed to me.

    And I know from professional knowledge that Humana is very forward thinking in terms of medical/clinical management and use of IT.

    Good for Humana and their customer members.

  5. Drandon says:

    How about those “invincibles” that only sign up when they get sick? No pre-existing conditions. Then we’ll see how successful your ACA will be.