Why March 31 is Far More Important –Particularly for Younger Americans  

The media has described November 30 as the administration’s “self-imposed” enrollment deadline, but in fact conservatives—and the media itself—insisted on a date, demanding, over and over again, that the administration answer the “$400 million question”: How long will it take to fix the Federal Exchange?

Ultimately, Jeffrey Zients, the Obama administration’s new health-care website, promised the site would be “generally operational” for “the vast majority of users” by the end of November.”  No one quite knew what that meant.

But immediately, the media turned the November 30 deadline into a headline. On November 28,CNN declared:  “A moment of truth approaches for President Barack Obama’s signature health care reforms with Saturday’s self-imposed deadline to get the website to work properly for most users.”

Reuters chimed in: “President Barack Obama’s healthcare law is facing its biggest test this weekend since its disastrous October 1 launch . . .  If the website does not work on Saturday’s deadline, that could turn off millions of uninsured Americans, especially young and healthy consumers whose participation in the new insurance exchanges are critical.”

Where, I wondered, is Reuters getting its information? From Fox?

      Younger Americans Are Not as Intimidated by Website Snags

There is absolutely no reason to think that 20-something and 30-somethings are more frustrated with the technical glitches than anyone else. There is, in fact, every reason to think that young Americans are not nearly as bothered by software bugs.

First, keep in mind that most Millennials haven’t even tried to sign up. This is because they are not as anxious as older, sicker Americans about securing insurance.

But when they do go to the Healthcare.gov website, a twenty-something is likely to have an easier time than a 50-something when trying to work his way around glitches. Unlike many of their elders, Millennials solve software snags every day – at home, at work, at school. Twenty-five-year-olds who have grappled with Windows 8 will not be daunted–or surprised—by a few bugs.  For many younger Americans working through such problems is almost intuitive.

This also helps explain why, despite the sustained bad-news blitz, a CNN poll released just last week shows that 18-34-year-olds overwhelmingly believe the president’s healthcare law will work: “Seven in 10 younger Americans think the current problems faced by Obamacare will eventually be fixed. Senior citizens are split, and most people between 35 and 65 years old think that the system is permanently broken,” said CNN Polling Director Keating Holland. . (So much for 35-65 year boomers. Some of the folks in my generation are getting grumpy).

The Success of Reform Turns On the Health of Those Who Sign Up

Keep in mind that 18-34-year-olds are needed to make the Exchanges work. As Ezra Klein pointed out recently, what matters most is not the absolute number of Americans who join the Exchanges this first year, but who they are.

He explains:  “Back in July, when Sarah Kliff and I asked the White House how they defined ‘success’ in 2014, they always defined it as a function of the mix of people in the exchanges  . . . rather than the number of people in the exchanges . . . More wasn’t necessarily better. Twenty million enrollees would be a disaster if only 1 million of them were young and healthy. . .

“If they got 10 million people to sign up, about 3.9 million had to be young and healthy. If they got 4 million to sign up, success would mean making sure 1.5 million were young and healthy.. . . so long as the ratio was right, the premiums will remain low, and so when people eventually come to buy insurance, they can get a good deal, and they’ll want to sign up.”

In other words, it doesn’t matter whether 7 million or 5 millionAmericans join the Exchange this year. If enough 20-somethings and 30-somethings join the risk pool, this will ensure that premiums are as low in 2015–or even lower– than they were in in 2014.

This is the scenario that reform’s opponents fear most..

          Many Young Americans Will Wait Until March

hose who argue that reform is a “failure” because October and November enrollments remain low emphasize that if potential Obamacare customers haven’t signed up by the end of November they will have only 23 shopping days left if they want be covered by January 1.

But many hale and hardy 20-somethings don’t really care whether they are insured by the first of the year. They just want to avoid forking over $95 because they  decided to ignore the mandate that they purchase coverage. In that case, they have until March 31. That is when open enrollment ends—and when the penalty kicks in for those who decide not to buy insurance.

What Happened When Massachusetts Mandated That Its Citizens Buy Healthcare?

Massachusetts’ experience suggests that, for young healthy Americans—the folks we need to keep premiums at reasonable levels– March 31 is the most important deadline

In Massachusetts enrollment in Commonwealth Care began in March of 2007. The state mandated that  but the state’s citizens wouldn’t have to pay a $291 penalty if they purchased insurance by November of 2007.A study published in the New England Journal of Medicine shows just how important that November deadline was.

Researchers began by separating enrollees into two groups—those who were healthy when the joined Commonwealth Care, and those who were not.  Using claims data from the first year that these patients were part of Commonwealth Care, they measured the health mix of the population who had enrolled from March 2007 through June 2008, looking at average age, average monthly health care expenditures, and the proportion of enrollees suffering from a chronic illness. We identified patients as having a chronic illness if within the first 12 months after enrollment they had an office visit at which a diagnosis of hypertension, high cholesterol level, diabetes, asthma, arthritis, an affective disorder, or gastritis was recorded

The chart below reveals the enormous spike in the number of healthy applicants joining the program in November–just in time to dodge the penalty. That month, there was a much smaller increase in the number of chronically ill people signing up for insurance. Many already had purchased insurance.

The chart also shows that the number of healthy applicants continued to outpace sicker applicants for another six months. Clearly the mandate made a huge difference in ensuring that younger customers joined the pool.

I suspect that over the next four months, we’ll see the same pattern nationwide.. I don’t expect to see most Millennials scrambling to buy insurance in December. Very likely, the bigger spike will come in March

This is why MIT’s Jon Guber an architect of Massachusetts Reform, plan calls the October and November Obamacare enrollment figures “basically meaningless”:

“Look, when we opened our system in Massachusetts the first month the people could pay premiums and enroll, 123 people enrolled,” Gruber points out  “By the end of the year, it was 36,000. That meant we got .3 percent of the people the first month. By that standard the federal government did great, 1.3 percent of the people the first month. It’s too early to say anything useful. The real deadline we have to focus on is March of next year.”  

I agree. When we look at who has signed up at the end March, we will be able to assess how well reform is doing—and how likely it is that premiums will rise in 2015.