The Affordable Care Act Can Survive Low Enrollment and Adverse Selection in the First Year

Availability: PDF | Printer-Friendly Page
Posted to Web: December 18, 2013
Share on Facebook Share on Twitter Share on LinkedIn Share on Digg Share on Reddit  
Low enrollment levels in the health insurance marketplaces in the first year may also mean disproportionate enrollment of high cost individuals. This could lead to higher premiums and destabilization of the nongroup market, but this is unlikely. First, policies put in place in the law, specifically risk corridors and risk adjustment, will provide insurers with some significant financial protection. Second, low enrollment does not necessarily mean adverse selection – there are strong incentives for young adults to enroll. Third, insurers cannot necessarily recoup any 2014 losses by raising 2015 premiums. Insurers will need to set premiums for 2015 based on the expected enrollment in 2015, not based on any losses that may occur in 2014.

Usage, posting and reprint of materials on the UI web site:

Most publications may be downloaded free of charge from the web site in PDF format. This information may be used and copies made for research, academic, policy or other non-commercial purposes. Proper attribution is required. Copyright of the written materials contained within the Urban Institute website is owned or controlled by the Urban Institute. Posting UI research papers on other websites is permitted subject to prior approval from the Urban Institute—contact

If you are unable to access or print the PDF document please contact us or call the Publications Office at (202) 261-5687.

Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

© 2009 Urban Institute | Contact Us | Privacy Policy