Insurers priced premiums on hopes of a healthier customer base.
As the deadline nears for Minnesotans to purchase health insurance for 2014 on MNsure, an unsettling question remains: Will young, healthy people sign up on the online exchange and infuse plans with the premium revenues they need to pay for all the older, sicker people?
Through November, half of the enrollees who bought private health plans on MNsure were between the ages of 51 to 64, even though that age group makes up only 21 percent of the state’s non-elderly population. That was hardly the plan when the exchange was created under the federal Affordable Care Act to cover uninsured Minnesotans and improve benefit options for sick and self-employed people who didn’t have workplace benefits.
Private plans on the exchange generally set premiums with the expectation that the median age of enrollees would be closer to 40, which is what they typically saw in the plans they sold on the individual market in past years. The current median age of MNsure enrollees is 50.
“That’s kind of scary,” said Scott Keefer, vice president of policy and legislative affairs for Blue Cross and Blue Shield of Minnesota.
Keefer and other insurance officials have reasons to remain optimistic. After Massachusetts enacted a state insurance mandate in 2006, it took that state’s younger adults longer to sign up as well. The mandate to buy insurance as part of federal reform doesn’t kick in until April 2014, so it is possible that cost-conscious young adults are waiting until the last possible minute. But they aren’t leaving the crucial issue to chance.
A ‘broader risk pool’
MNsure’s new chief executive officer, Scott Leitz, said in a radio interview Friday that the organization will be “very actively targeting that group,” and a MNsure spokeswoman said increased marketing on college campuses is being considered.
“One of the important things about MNsure is getting young, healthy folks in so that they have coverage and that they’re part of the broader risk pool,” Leitz said.
Tiah Colacci, a 28-year-old nanny, is getting enrolled just under MNsure’s deadline for benefits by Jan. 1. While she had problems with the website the first time she tried it, she said her delay was because she needed time to compare MNsure plans with the benefits available through her nanny agency. It turned out that MNsure’s plans were substantially cheaper.
Her 30-year-old fiancé, by comparison, grew weary of the site’s bugs this fall and bristled at the notion of buying a costly plan to essentially pay for the health care needs of older and sicker enrollees.
“He got frustrated the first time he went on,” Colacci said, “and then he didn’t want to go on again.”
No tolerance for glitches
Insurance officials worry that low initial enrollment of young adults might reflect their intolerance with the on-again, off-again glitches of the MNsure website. In October, many people couldn’t complete the security questions and create accounts on the site. Others would complete applications but see their status as “pending” for weeks. On Monday, the site was down for brief periods. On Tuesday morning, it was struggling to accept new accounts.
“If you’re under 30, you have no tolerance for a poor technological experience,” Keefer said. “That’s what I worry about most … that those young people might not come back.”
Nine states with their own insurance exchanges under federal reform have published data showing the age ranges of the enrollees, and most of them are like Minnesota in that they are lacking younger people so far.
Washington and Rhode Island, for example, report that more than 40 percent of their enrollees to date are 55 or older — often early retirees bridging the time until they are old enough for the federal Medicare program. Less than a third of enrollees in both states have been younger than 34.
Minnesota records its age data in slightly different clusters than the other eight states, but its figures show similar trends. People 30 and younger make up 48 percent of the state’s non-elderly population, but only 23 percent of its MNsure enrollees.
Aiming at ‘young invincibles’
“To some degree, we need to be driving home the message that, no matter what age you are, you have health risks and health care is expensive,” said Larry Bussey, director of communications for Medica, a Minnetonka-based insurer with plans on the exchange. “You see that with the MNsure campaign and with the Paul Bunyan advertising. A lot of it is about accidents and things like that that can hit anybody at any age.”
The MNsure ads, one of which features Babe the Blue Ox driving a boat and Bunyan crashing on water skis, “tested very well with the younger audiences” and were part of the strategy to recruit younger enrollees, said Jenni Bowring-McDonough, a MNsure spokeswoman.
Young adults have always been difficult to lure into health insurance unless they received it from their employers; they’ve often been labeled “young invincibles” because of the attitude that they’re too healthy and fit to need insurance.
Blue Cross created a plan in 2007 called Simply Blue that was targeted to young adults by keeping premiums down, covering preventive care, and eliminating benefits they didn’t immediately want such as maternity coverage. Medica created similar products and launched a campaign with ad images of a young gay couple, an ear with six piercings and a sky boarder.
Minnesota legislation further targeted that population in 2010 by allowing young adults to remain on their parents’ health plans until age 25, regardless of whether they were employed or in school, and then the federal Affordable Care Act expanded that cutoff to age 26.
Jonathon Gustafson, a 33-year-old self-employed IT consultant, said he will soon be shopping for benefits on MNsure for himself and his wife, who just aged out of her parents’ insurance plan, and for their new baby. He said the delay in signing up was because he was losing his coverage under MinnesotaCare due to an increase in his income, and he was waiting for formal notification.
Colacci said she was pleased to find three plans on MNsure that were affordable and offered the benefits she wanted. She was willing to put up with any technical glitches if the end result was better benefits.
“I happen to like that there is this option,” she said, “so I think I have more forgiveness toward all of this.”
Jeremy Olson • 612-673-7744