In the Affordable Care Act's second enrollment period, insurers and exchange will again try to lure the young adult demographic, a challenge that will test risk adjustment policies and the best minds in marketing.
The ACA risk pool's need for young adults may not be as all-important as some have feared; with the risk adjustment, reinsurance and risk corridor programs, adverse selection isn't necessarily adverse -- in some cases it's fairly profitable -- especially in the first years.
But as those programs wind down and insurers take on more direct risk for exchange members, garnering young, healthy adults is going to become more important, which is one reason why government health officials and insurers are hoping more will turn out in this, the second, ACA open enrollment period.
Nationwide in the first open enrollment period, only 28 percent of exchange plan members were 18-34 years old, even though they comprised 40 percent of the eligible population.
It's not surprising that young adults may be skeptical of the value of health insurance. Many have modest incomes, may be working multiple part-time jobs, have large college-debt burdens, don't use healthcare that often and wonder why they'd want a health plan with a high deductible if they have to pay a monthly premium. Plus, there was last year's terrible online exchange experience.
In a poll by the Harvard Institute of Politics late last year, less than 30 percent of uninsured 18- to -29-year-olds said they were planning to buy insurance.
Another poll by Deloitte seems to suggest that affordability, or at least perceptions of it, is the biggest hurdle. In survey of 500 young adults, less than 20 percent of those who didn't enroll in a plan said they opted out because they don't expect to need insurance. More than 60 percent said they didn't think they could afford the monthly contributions on top of all their other expenses.
Nonetheless, insurers and exchanges are reaching out to younger demographics with messages of affordability and personal security, hoping that those who sat out last year will consider their options this year. Among the marketing strategies exchanges and insurers are turning to, one campaign is trying to exploit a key value of the Millennial generation: sarcasm.
Get Covered Illinois, the state's insurance marketplace, is rolling out the "Luck Plan" to coincide with open enrollment with the aim of reaching young Illinoisans, a great many of them in greater Chicago.
Created by the PR agency Downtown Partners Chicago, the Luck Plan campaign is using a dedicated website, social media and TV advertising to comically persuade young adults that they really do need health insurance and that they can find it at Get Covered Illinois.
Whether or not that messaging resonates and generates more than just laughs and social media buzz remains to be seen.
In Colorado last year, two consumer advocacy groups, ProgressNow Colorado and the Colorado Consumer Health Initiative, produced a series of "Got Insurance?" ads to support the state exchange, Connect for Health Colorado.
One featured a young woman and young man standing together, the woman wondering in bubble quotes: "Let's hope he's as easy to get as this birth control. My health insurance covers the pill." Another ad in the series -- which were not produced with the exchange -- featured young people preparing to taking shots of liquor from a ski with the tagline: "Saving money on flu shots leaves us more money for fun shots."
The ad campaign got a lot of attention, a good deal of it negative, from ACA critics and conservative groups, and its success would be hard to measure. Connect for Health Colorado's proportion of enrollees ages 18 to 34 was slightly below the national average, at 26 percent, although the exchange's enrollment exceeded federal expectations by 30 percent. (Illinois' exchange also enrolled 50 percent more than expected, but did not break out enrollment by age.)
This next exchange enrollment may be better in some areas but just as challenging in others -- and maybe more so. Premium increases are modest, but with the silver benchmark plans to which subsidies are pegged changing in many places, consumers will have to choose another plan, potentially with a whole new provider network, to keep their premiums to a modest increase.
In any case, it's the young adults who are needed to stabilize premiums in the long term.
"Plan-adjusted rates however will drive headlines as payers respond to costs based on learnings from plan enrollees in year one," predicts John Kelly, a principal business advisor at healthcare technology company Edifecs. "If more young 'invincibles' join this year then premiums will drop."