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More young people enrolling in Obamacare, but numbers still lag

After four full months of open enrollment, younger Americans are signing up for Obamacare in greater proportions, the Health and Human Services (HHS) Department announced today.

Still, as of Feb. 1, just 25 percent of people who have enrolled in a private insurance plan through the new Obamacare marketplaces are between the ages of 18 and 34 -- falling below what experts have called the ideal proportion of young adults in the new health insurance marketplace.

Nearly 3.3 million people have selected marketplace plans as of Feb. 1. That includes 1.9 million who have selected plans via, the federal Obamacare portal that serves 36 states, as well as 1.4 million who have selected plans on state-based Obamacare sites.

Of those 3.3 million Obamacare enrollees, 807,515 are young adults -- up by 65 percent since the end of December (when there were 489,460 enrolled). That rate of enrollment outpaced enrollment among all other age groups combined, grew by 55 percent.

HHS also reported for the first time data on the types of plans Americans are choosing on the marketplace. As many as 81 percent of young adults are forgoing the cheapest option (“bronze” plans) and opting for “silver” or higher.

“The covered population is getting younger, and those younger Americans are choosing high quality” plans, HHS Secretary Kathleen Sebelius told reporters Wednesday.

Open enrollment on the new Affordable Care Act marketplaces began in October. The administration and nonpartisan experts predicted that by the time open enrollment closed at the end of March, around 7 million would be enrolled. The nonpartisan Congressional Budget Office has since adjusted its estimate to 6 million.

Of those enrolled by the end of March, close to 40 percent would be people between the ages of 18 and 35, the White House said last year. Similarly, health policy experts said that in order to keep the new Obamacare marketplaces sustainable, the proportion of young adults enrolled should be close to the proportion they represent in the pool of potential individual market enrollees -- or around 40 percent.

Julie Bataille, a spokeswoman for the Centers for Medicare & Medicaid Services, said Wednesday the agency is “encouraged” by the enrollment numbers so far. She added, We “believe we’ll see more enrollees of young people in the weeks to come. Many of them are not likely to act until the deadline drives them to do so.”

She declined to say whether HHS is still aiming to have young people account for close to 40 percent of enrollees.

Even if enrollment among young people doesn’t increase, the impact could be marginal, according to research from the Kaiser Family Foundation. Researchers there showed that if young adults only made up 25 percent of the market rather than 40 percent, overall costs in individual market plans would only be about 2.4 percent higher than premium revenues. Given that insurers set premiums to achieve a 3-4 percent profit margins, they'd still be making money. They would, however, likely pass on that increased costs to customers in the form of higher premiums -- though hardly high enough to risk upending the marketplace.

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