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Obamacare young people sign-ups nearly double

The third time may be the charm for signing up young people in Obamacare.

The federal health insurance marketplace has seen a sharp increase in younger people signing up for coverage in 2016 compared to the same time last year, which could greatly help strengthen the financial health of insurance plans in Obamacare's third enrollment season, a top official said Tuesday.

As of last Thursday, about 2.1 million people under the age of 35 had signed up for plans sold on HealthCare.gov, the federal exchange that serves 38 states, said Health and Human Services Secretary Sylvia Burwell.

That is about 1 million more people in that age group than had selected a plan on HealthCare.gov by the same time last year, she noted.

An insurance advisor with Univista Insurance, helps a customer shop for a health plan under the Affordable Care Act, also known as Obamacare, on Dec. 15, 2015 in Miami.
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An insurance advisor with Univista Insurance, helps a customer shop for a health plan under the Affordable Care Act, also known as Obamacare, on Dec. 15, 2015 in Miami.

Burwell also announced that from Nov. 1 through last Saturday, a total of more than 8.2 million consumers had either signed up for plans on HealthCare.gov, or been automatically re-enrolled in their existing coverage so that their coverage will continue in 2016.

That compares to the 6 million who had signed up or been automatically re-enrolled as of the same time last year. About 29 percent of the sign-ups so far are from new customers, as opposed to returning ones.

Florida and Texas were the leaders in enrollment on HealthCare.gov — 1.5 million sign-ups in Florida, and slightly more than 1 million in Texas.

The current pace of enrollment on HealthCare.gov — which does not include tallies from the 13 exchanges run by individual states or the District of Columbia — suggests that Burwell's previous prediction of having 10 million paying Obamacare customers nationwide by the end of 2016 could come true. For enrollment to be official, people must pay their first month's premium.

"We're off to a strong start," said Burwell during a conference call with groups that promote Obamacare enrollment.

Open enrollment for 2016 plans closes Jan. 31. Under the Affordable Care Act, nearly all Americans must have some form of health coverage or risk a fine, which in 2016 will be the higher of $695 per adult or 2.5 percent of household income.

Burwell was particularly pleased by the strong surge in enrollment among young adults. "We're excited about this," she said. "It's good news. It means a younger risk pool."

The younger an insurer's risk pool, or group of customers, generally speaking, the better chance plans have to turn a profit. Younger enrollees typically spend more in premiums than they use in health benefits, in contrast to older, sicker enrollees, who can use more benefits than what they pay in premiums.

The lag in getting relatively large numbers of young people to sign up in Obamacare plans during the first two enrollment seasons, for 2014 and 2015, has worried advocates of health-care reform and insurers.

Larry Levitt, a senior vice president and Obamacare expert at the Kaiser Family Foundation, said that increasing the number of young adults could assuage those fears.

"The first people in the door were older and sicker, so increasing enrollment is key to balancing out the risk pool," Levitt said. "The increase in sign-ups we're seeing so far this year is bringing more young adults into the insurance pool, and probably more healthy people as well."

But Levitt also said he thought the better "apples-to-apples comparison" for the change in youth enrollment is "new plan selections" by people as opposed to all plan selections, which includes both new enrollees and existing customers. All plan selections grew from 1.1 million last season to 2.1 million. But the number of new plan selections rose to 980,000 so far this season, compared to 670,000 at the same point, which Levitt said represents "strong growth, but obviously not doubling."

Burwell said she was also happy about the strong demand in advance of a mid-December deadline to sign up for coverage that would take effect Jan. 1, saying there were "unprecedented numbers" of callers to HealthCare.gov's telephone help line and to its website.

Anne Filipic, president of the Obamacare promotion group Enroll America, said, "Today's announcement that more than 8.2 million Americans an increase of 29 percent over this time last year have chosen a plan or been automatically renewed on the health insurance marketplace makes clear that the success we've seen under the Affordable Care Act is not just holding steady: it is growing and thriving."

Also Tuesday, HHS said that the number of officially enrolled Obamacare customers as of the end of September was about 9.3 million people. That's about 600,000 less than the number of paid-up customers as of June.

But the third-quarter tally is still higher than the 9.1 million paying customers HHS previously projected will be still enrolled by the end of this month.

Some of the drop-off in enrollment may have come from people getting health coverage elsewhere, including from job-based plans or government programs such as Medicare and Medicaid.

Another possible factor in driving down the total paid enrollment may be people dropping their plans after seeing reductions or eliminations in the subsidies they receive to help pay their premiums and out-of-pocket health expenses.

More than 730,000 households in the second quarter of 2015 had their subsidies adjusted because of inconsistencies between their stated income, and what their income had turned out to be. A person's income determines how much they get in Obamacare subsidies. If someone's income turned out to be higher than what they projected at the time they applied for coverage, their subsidies would be decreased.

About 84 percent, or more than 7.8 million of the enrolled customers, are getting financial assistance to help pay for their Obamacare plans, HHS said. The average subsidy, or tax credit, received by those customers was $271 per month, according to the department.