Wanted: 2.7M young people

Sarah Kliff and Ezra Klein wrote,

How many younger people are needed each year to hold down premiums depends on how many people sign up for the marketplaces. If the total this year is 7 million people, then about 2.7 million need to be in the 18-to-35 set.

I’ve heard this need for 2.7M young enrollees before and wondered where the figure came from. As Kliff/Klein note, it seems like it is driven by some affordability threshold. That’s plausible enough. Younger people are, in general, cheaper to cover. The more that enroll in marketplace (formerly “exchange”) plans, the lower average premiums would be. I imagined somebody did a calculation that started with affordability and backed into 2.7M needed young people.

But where is that calculation? None of the wonks I emailed this morning know. However, on a tip, Adrianna McIntyre did the following calculation and shared it with me by email.

  1. Suppose one wants to hit a target of 7M enrollees, which is what the CBO expects in 2014 (PDF).
  2. What proportion of 7M might be 18-35 years old? One estimate is it’s 19 million uninsured 18-35 year olds divided by 49 million total uninsured, or 0.39.
  3. Lo and behold, 7M x 0.39 = 2.7M.

That is, one sense in which 2.7M young enrollees are “needed” is to hit CBO’s total of 7M in 2014. Of course, that 7M total are expected to enroll is, itself, related to affordability. How sensitive it is to the number of young enrollees is unclear. If only 2.5M young people enroll, how much more expensive will premiums be? How many fewer older people will enroll? How badly do we need every one of those 2.7M young people?



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