Does Massachusetts Hold Hope for Obamacare?

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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(Corrects description of buyers who were ineligible for subsidies in sixth paragraph.)

Early enrollment data from the states seemed to suggest that the demographics of enrollees on the exchanges weren't looking so hot. Early on, the Barack Obama administration was saying it wanted about 40 percent of the enrollees to be adults under the age of 35. Data from the states seemed to show that the young were more like 20 to 25 percent of total enrollment. If those numbers hold through the end of open enrollment, this alone could cause premiums to rise 4 to 6 percent next year.

Today we got the official numbers for the nation as a whole. And they mirror what we saw in the states: Young adults make up 24 percent of total enrollment. The exchanges also skew female, which will raise premiums if the gender balance is still off come March.

But don't start writing obituaries for the Patient Protection and Affordable Care Act's insurance markets yet. As Jonathan Cohn has pointed out, enrollment in Massachusetts also skewed young in the early months, then rose to 31 percent by the deadline. That's not as high as the feds are hoping for the federal exchanges, but it's significantly better than 24 percent:

Source: Massachusetts Health Connector, data analyzed by Jonathan Gruber of MIT

It's not certain that the rest of the country will follow suit; open enrollment in Massachusetts lasted much longer than it did for the national system, and while it had some technical hiccups, they weren't so severe. So ultimately, our enrollment could look either better or worse than things did in Massachusetts' health-care reform law.

The rest of today's conference call mostly covered stuff we already knew, such as total enrollment numbers, or things the administration didn't know, such as how many people were insured compared to January 2013. But we did get a sense of what sort of plans people are buying and how many of them qualify for subsidies.

Five million people were deemed eligible to buy a policy on the exchanges; 2.7 million, or 54 percent of them, were eligible for subsidies. But of people who actually selected a plan, 1.68 million, or 80 percent, were subsidized. To put it another way, 62 percent of the people eligible for subsidies selected a plan, but only 8.5 percent of those who weren't eligible for subsidies actually purchased one.

That is very different from the information we were getting in December, when most of the people who selected plans were not eligible for subsidies. The giant surge in December enrollment seems to have been composed almost entirely of people who were eligible for subsidies. And most of them chose pretty generous coverage: Only 1 percent of the marketplace enrolled in catastrophic plans, and only 20 percent have the so-called bronze plans, the bottom tier of regular plans. More than half chose silver, the level of coverage that the subsidies are pegged to, with the rest distributed among gold and platinum plans.

This is much closer to what the Congressional Budget Office was projecting, in terms of subsidized enrollment; it had predicted that about 85 percent of the people on the exchanges would get subsidies. So in one sense, it's not novel. But it does show enrollment looking a lot more like the wonks had been projecting, and that's important. The next step for the administration is to get the mix of young and healthy people more in line with initial forecasts.

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