Will Millennials Flocking to D.C. Go for Obamacare?
Policy + Politics

Will Millennials Flocking to D.C. Go for Obamacare?


Few segments of the population have been getting more scrutiny recently than millenials who have been battered by the economy and saddled with student loan debt – yet deemed critical to the success of Obamacare.

Conventional wisdom has it that these young people are stuck in place, often living in their parents’ basements, because they can’t find jobs. But that has changed a lot during the past two years, according to the latest Census data, and young people are increasingly mobile and willing to move in search of employment and a better lifestyle.

Now comes a study by William H. Frey of the Brookings Institution touting Washington, D.C. as the new mecca of millennials between the ages of 25 and 34.

Between 2009 to 2012, the national capital region had the highest average annual net gain of millennials of any large U.S. metropolitan area, according to the report.

Related: Millennials: No Jobs, In Debt, Still Living at Home  

Unfortunately for the administration, D.C had one of the worst health insurance enrollment numbers of any of the exchanges during the first full month of operation in October. If the Washington experience is a bellwether for recruiting enrollees for Obamacare, the system could be in bigger trouble than it is now.

The Washington area on average gained 12,500 millennials per year throughout that period, compared to the loss of young adults during the Great Recession. And while some older empty nesters are also moving to the city’s revitalized urban corridor, most of the city’s growth in the past decade has been spurred by people in their 20s and 30s, according to the Washington Post.

A few other “cool” cities, including Denver, San Francisco, Portland, Austin and Minneapolis, have shown a rising post-recession young adult boom as well. But nothing tops the Washington area as a magnet for young people, with its cornucopia of government and federally related jobs and a local economy that was insulated more than most from the worst of the recession. A surge in spending on government contracts, lobbying, legal services and commercial expansion have all rendered D.C. an obvious target for well-educated and job hungry young people.

Related: Millennials: Young, Broke, and Spending on Luxury

A Georgetown University Center on Education and the Workforce study released in September found young workers, on average, are now 30 years old when they first earn a median-wage income of about $42,000, a marker of financial independence, up from 26 years old in 1980. That’s good news for millennials.

Yet only about a third of adults in their early 20s work full time, a proportion that rises to about half of adults in their late 20s. The labor-force participation rate for young people last year declined to its lowest point in about 40 years, according to the Georgetown University report. The decline in employment among young people reflects a drop among the broader population. 

While many millennials continue to struggle financially, the Obama administration is counting on a surge in signups by these young people to salvage Obamacare. The administration must convince 2.7 million millennials to buy health insurance, or the new government exchanges plagued by technical glitches and controversy could prove to be a total bust.

Because these younger Americans are usually healthy and rarely rack up huge medical bills, their monthly premiums would make it cheaper for the exchanges to affordably insure 4.3 million other Americans. 

The disappointing October enrollment numbers released last week confirmed that the administration is far from meeting its goal. Just 106,000 people selected plans on the federal and state-run exchanges, compared to the previously anticipated 500,000. And only 300 people or 1 percent of the eligible population signed up in the District of Columbia, the country’s Mecca of millennials.

Related: Why Millennials are Obamacare’s Last Hope

The White House is hoping that young, healthy Americans will sign up at the last minute—as they did in Massachusetts in 2007. By November, the final month of open enrollment, the portion of enrollees 35-years-old and younger had more than doubled to 36 percent from February, one month into the enrollment, according to an analysis of monthly applications by professors Amitabh Chandra of Harvard, Jonathan Gruber of the Massachusetts Institute of Technology and Robin McKnight of Wellesley College, Bloomberg reported.

The Obama administration anticipates – or at least hopes -- Obamacare enrollments will follow a similar pattern.

However, some experts say comparing the federal exchange to Massachusetts is unfair because only a relatively small portion of the state’s population lacked insurance at that time. Also, Massachusetts had a much longer open enrollment period of 15 months, compared to just six months for Obamacare. And the Massachusetts program didn’t suffer from widespread technical problems that prevented people from enrolling.

President Obama’s announced “fix” last week, to allow insurers to continue offering individual insurance policies that do not meet the minimum standards required under the new law, could also set back the enrollment numbers for these young Americans. Unlike the insurance plans being offered on the federal and state exchanges, the individual policies tend to offer lower premiums because they offer fewer benefits and exclude people with pre-existing conditions. Those policies could prove far more appealing to younger, healthier people.

“If now, fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers,” Karen Ignagni, president of America’s Health Insurance Plans told Bloomberg.

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