Moody's Outlook Dour on 'Young Invincibles'

John Commins, January 21, 2014

Many of the people in the 18-to-24-year-old demographic who've signed up for coverage under health insurance exchanges may be among the least healthy in their cohort, says Moody's Investors Service.

Despite assurances from the Obama Administration that growing numbers of "young invincibles" are signing up for coverage on the health insurance exchanges, skeptics including analysts at Moody's Investors Service remain fearful that the risk pool will remain skewed towards older and sicker Americans.

Last week the Department of Health and Human Services released the latest enrollment figures for the exchanges through late Dec. 28. While the pace of the sign-ups increased about seven-fold in December—nearly 1.8 million people signed up for coverage that month—only about 24% of the new enrollees were in the coveted 18-34-year-old age group.

HHS officials said they saw an eight-fold increase in the numbers of young adults signing up for coverage, but the totals so far are well below the 40% threshold that Obama Administration officials had hoped for. With that in mind, Moody's Investors Service said this week that the preliminary healthcare exchange demographics are a credit negative for health insurers.

"The enrollment statistics show that only 24% of those who have enrolled in the exchange for private healthcare insurance are in the critical 18-34-year-old age group, well short of the 40% target based on the proportion of eligible people in this age group," Moody' said.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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