Adverse Risk Selection Continues in the Washington State Health Insurance Exchange

January 26, 2014

The Washington Health Benefit Exchange just released the latest enrollment numbers. (Here) These were  the enrollment figures from December 23rd, which was the deadline for coverage that began on January 1, 2014. Although somewhat improved over the November data, the numbers still reflect a serious adverse selection problem.

A total of 382,000 people enrolled in health insurance plans in the Washington exchange, but 82% of these people enrolled for Medicaid which is an entitlement totally paid for by taxpayers. Of the 67,000 who purchased private insurance in the exchange, 77% qualified for taxpayer subsidies.

Although 30% of total enrollees were young, and presumably health individuals, only 22% of those who purchased private plans were in the 18 to 34 age range.

The high percent of Medicaid enrollees and the low percent of healthy, young people on the private side of the exchange continue to be a worrisome trend. The financial success of Obamacare relies on a high percent of young, healthy individuals signing up to pay for the older, sicker people. This is not the trend in Washington state and is not the trend nationally.

Health insurance claims will come in over the next few years. Without a large, healthy risk pool in the private market, the need for a huge taxpayer bail-out is almost guaranteed.