Obamacare blitz: Can US persuade young 'invincibles' to buy health coverage?

In Oregon, folk singers croon about the state's health insurance exchange in artsy television ads. Connecticut is passing out "Get covered" sunscreen at the beach, and a Colorado poster features a young man with a "winner" medal, fists pumped, and the slogan "When insurance companies compete, the only winner is you."

The federal government and states in support of the Affordable Care Act (ACA), better known as Obamacare, are banking on finding a winning strategy to ensure enough young Americans sign up for the state insurance exchanges, set to open Oct. 1, to keep rates low as promised.

But people like Kay Lamberti, age 29, a former nursing assistant now working a temp job in Providence, R.I., aren't cheering for the health exchanges just yet. Ms. Lamberti has gone for five years without health insurance and doesn't plan on getting it until she gets a higher paying job.

"It's not in the budget," says Lamberti. "I'm pretty healthy at the moment and I know things could happen, having had worked in the healthcare field, but I can't afford it based on that chance."

Lamberti is representative of the newest challenge facing Obamacare, after it survived legal challenges from half the states and 40 repeal attempts by House Republicans: Analysts now are warning that cash-strapped uninsured Americans ages 18 to 34 may stay away from the new insurance markets, potentially driving premiums up instead of down.

Urgency is mounting with the next big deadline coming Oct. 1. Health-insurance exchanges offering uninsured Americans a range of choices must be up and running by then. By April 1, 2014, everyone must be enrolled in a plan. If not enough young adults sign up to offset the cost of insuring older and ill people, insurance rates will rise.

That wouldn't necessarily signal the failure of Obamacare – other big, government programs such as Medicare and Social Security got off to rocky starts but survived, experts say. Yet the political stakes are high, with Republicans still pushing for repeal and public skepticism widespread, and the success of the program next year could hinge on bands of activists across the country trying to convince young and healthy Americans that health insurance is something they can't live without.

"The fear in the Obama administration is you're going to get the sick people signing up and the nonsick not signing up and that would be a disaster. The insurance pools won't work," says Lawrence Jacobs, a political science professor at the University of Minnesota in Minneapolis and author of "Health Care Reform and American Politics."

To ensure that doesn't happen, the federal government and some states are expected to spend at least $700 million on marketing and public outreach about the new exchanges from late summer through the fall – and much of it will be aimed at this demographic.

"We know that in order for us to be successful, to really make sure the marketplaces are effective, there's a smaller subset that needs to really be at the center of our focus for outreach. And that's about 2 million to 2-1/2 million young and healthy 18-to-35-year-olds," said David Simas, the director of polling for President Obama's 2012 campaign and a senior adviser to the president, in July on PBS's "NewsHour."

Officials expect that if 7 million uninsured enroll in the marketplaces this year, 2 million to 2.5 million of those need to be young adults in order to make the insurance rates work.

The administration has put Mr. Simas in charge of bringing the same micro-targeting strategies that were so effective in the 2012 presidential campaign to bear on the push for Obamacare enrollment. Supporters will pinpoint which doors to knock on and advertise on Spike TV and other networks they've identified as popular with the uninsured.

There are signs it won't be an easy sell for Millennials. Premiums for younger, healthier individuals could increase by more than 40 percent because of changes under the ACA, according to a recent study by Oliver Wyman, a consulting firm in Milwaukee. Even when federal tax-credit subsidies are taken into account, prices may still rise for Millennials, though the new plans would offer much better coverage than what Millennials have now, the study found. Because the penalty for skipping insurance is low – $95 or 1 percent of income, whichever is greater – in 2014, supporters fear young adults will choose pocketbook economics. Younger individuals "are much less likely to find it economically rational to purchase coverage," the authors wrote in the study.

Over the summer, insurance companies including America's Health Insurance Plans and The BlueCross and BlueShield Association sent a letter to federal health officials warning that they feared low enrollment among young adults.

Making the pitch

Carmen Mirabal and Megan Hall are positioned at a prime corner of a farmers' market in North Providence. Behind them is a banner with pictures of smiling individuals and the name of the state's new health exchange, HealthSource RI, with the slogan "Your Health. Your Way."

"Have you heard about the state's new insurance marketplace?" asks Ms. Mirabal as a couple wanders over.

Mirabel and Ms. Hall are part of a "39 in 3" campaign launched by HealthSource RI to visit all 39 cities in the state in three months. The small state is one of just 16 states plus the District of Columbia running its own exchange. The other states opted to partner with or have the federal government run their exchanges.

When the ACA first passed in 2010, legislators expected most states would run their own exchanges. More money was budgeted for marketing state-run exchanges than the one run by the federal government. But most Republican governors opted out, leaving participating states to share far more marketing and outreach dollars.

Rhode Island, for instance, is expected to spend $2.3 million in federal money to market to the state's 122,400 uninsured. Oregon will spend $10.9 million to reach fewer than 600,000 uninsured. Texas and Florida, states with more than 6 million and 3 million people uninsured, respectively, received zero marketing dollars because they did not create their own exchanges.

Seven of the top 10 states with the highest number of uninsured people are not running their own exchanges and so have received no marketing money. In those states, advocacy groups are trying to fill the outreach gap.

The largest group is Enroll America, a nonprofit founded by former Obama administration officials. They've recruited more than 3,000 volunteers in the past seven weeks to knock on doors in 10 states that aren't doing their own marketing, and have reportedly purchased a seven-figure media buy.

"We're meeting [the uninsured] where they are, whether it's a barbershop or beauty salon, or a back-to-school program where we can meet young parents," says Ashley Allison, the organization's director of constituency engagement.

It's Ms. Allison's job to reach out to specific constituencies, including young Americans; women; African-Americans; Hispanics; the lesbian, gay, bisexual, and transgender community; and some faith groups.

The organization is also taking a page out of the Obama micro-targeting book. Its data and analytics team crafted a formula from census data, commercially available consumer databases, and demographic information to help identify where the uninsured live. So far, team members say, the tool has been very effective in leading them to knock on the right doors.

Tax credits and education to woo the wary

Jen Mishory is deputy director of the Young Invincibles, a nonprofit dedicated to helping young adults get health insurance. Started by young adults and taken from the insurance industry name for young people who believe they don't need health insurance, the group organizes grass-roots outreach and education.

"One thing we've seen, that you see across the board in polls, is that there's not this disinterest in health insurance," she says. "It's not that people don't want coverage. For the most part it's the inability for people to afford coverage. There haven't been that many affordable options in the past."

A Kaiser Family Foundation poll in June found that 77 percent of 18-to-25-year-olds and 71 percent of 26-to-30-year-olds say it's very important to them personally to have health insurance. When asked if insurance is worth the money it costs, the answer dropped a tick among 18-to-25-year-olds, and fell six percentage points among 26-to-30-year-olds, the group no longer eligible to remain on their parents' insurance.

Ms. Mishory emphasizes the availability of federal tax credits to help subsidize the cost of insurance as a major new benefit of the ACA. Tax subsidies will be available for single individuals who make between 100 and 400 percent of the federal poverty level, which is between $11,490 and $45,960 in 2013 dollars for an individual. People making below the poverty line may be eligible for Medicaid.

That means that a single 29-year-old nonsmoker making $28,000 a year can expect a tax-credit subsidy of just over $1,000, but would still have to pay $182 per month for a mid-level plan, according to a cost calculator by the Kaiser Family Foundation. If they buy a less comprehensive plan, they'll pay $135 a month after the subsidy, according to the calculator, which is based on Congressional Budget Office estimates.

If that same 29-year-old made $35,000, the cost calculator estimates they'd qualify for a subsidy of as much as only $52 a year. The remaining $229 per-month premium for the least comprehensive plan would come out of pocket.

When grouped with rent, groceries, smartphone costs, student loans, and other bills young adults often pay, that $229 premium may not fit in the budget.

Additionally, young adults are much less likely to be familiar with health insurance to begin with. Young adults make up the highest percentage of the uninsured, and an August Gallup poll found that 18-to-34-year-olds were the least familiar with the ACA out of all adults; more than 1 in 3 say they are not too familiar or not at all familiar with the law.

"We don't teach health insurance literacy in high school," Mishory says. "It's also a challenge to make sure ... [young adults understand] things like what is a premium, what is a deductible."

Young Invincibles plans on training more than 1,000 community groups on education and outreach strategies and has developed an app to send reminders of key registration dates.

'Young people know a bad deal'

Evan Feinberg, 29, is president of Generation Opportunity, a libertarian youth organization developing its own grass-roots campaign to send a different message about Obamacare.

"We're encouraging young people not to sign up for the exchanges because it's a bad deal," Mr. Feinberg says. "Fortunately that message resonates because people know a bad deal when they see it."

In particular, Feinberg notes that he can find 100 plans for himself with less-than-$100-a-month premiums on ehealthinsurance.com, a private online health insurance exchange. Critics say many of those plans don't offer coverage as robust as what's required under the ACA, but Feinberg says they cover what he needs.

Feinberg says his organization, which has 1.5 million Facebook fans, will be mobilizing on college campuses and sending field coordinators to target young professionals. (The group isn't saying how large its effort will be.)

In August, FreedomWorks and Young Americans for Liberty teamed up to announce a "Burn your Obamacare card" campaign: young adults who have made videos of themselves burning a symbolic Obamacare card, made to look like a Vietnam draft card, while saying why they oppose Obamacare.

"I'm burning my Obamacare card because I'm too busy paying student loans to pay for somebody else's health insurance," one of the video participants proclaimed.

'Affordable for me'

Some Millennials, especially those with what insurance companies call preexisting conditions, are thrilled about Obamacare. Lori Leonti, 27, a waitress at a P.F. Chang's in Providence, made a beeline for the HealthSource RI table at the farmers' market. She earns between $350 and $650 a week as a waitress, but spends $600 a month on antidepressant and anxiety prescriptions. She expects to receive tax credits and a plan that will include the cost of prescriptions.

"I'm very excited. I'm struggling with the bills now," Ms. Leonti says. Leonti and her mom came to the farmers' market specifically to visit the health exchange booth after hearing about the event on the radio.

John McColley, 25, from Tampa, Fla., in the past has applied for health insurance from BlueCross BlueShield Florida and Humana, but was denied after disclosing he's previously sought treatment for depression.

Mr. McColley, who is financially independent, makes $18,000 a year as a kindergarten teacher's assistant as he finishes a degree to become a teacher. On the Kaiser cost calculator, he learns he may qualify for subsidies that would enable him to pay about $65 a month for insurance. "I live off a strict budget and that's completely affordable for me," he says. "That's awesome."

Doom for Obamacare?

While reaching 18-to-35-year-olds is crucial for the initial rollout of the law, the consequences if young adults opt out of the exchanges likely won't pave the path to GOP dreams of repeal, some analysts say.

"I see no chance that the law is going to be repealed," Professor Jacobs of the University of Minnesota says, pointing to a bumpy rollout in early years for now-popular Medicaid, Medicare, and Social Security before implementation kinks were ironed out.

Proponents of the law also point out that they have until March 31, 2014, when enrollment ends, to recruit young people, and premiums wouldn't rise until next year if too many young people opt out.

"You can think of it like World War I trench warfare," says Jacobs. "This is going to be a sustained grind. Opponents are very determined, but they are up against very large federal agencies. You have a vast number of people with enormous resources [in support of the law] and they will not stop."