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Young adults flock to Web broker; Obamacare exchanges, not so much

With Obamacare's enrollment deadline just days away, publicly run health exchanges still lag far behind their targets for enrolling young adults, but a leading online insurance broker is excelling at signing up "young invincibles."

The broker, eHealth, said 45 percent of customers who purchased Affordable Care Act-compliant plans from Jan. 1 to March 23 were between ages 18 years old and 34. That's up from 39 percent of shoppers on the company's site, ehealthinsurance.com, from Oct. 1 to Dec. 31.

To see what an achievement this is, consider this: Young adults comprise just 25 percent of cumulative government-run exchange enrollments to date. There has been a slight uptick in that age group's share of sign-ups in each of the past several months, with the rate rising to 27 percent in both January and February.

"Young people are used to doing everything online and naturally gravitate towards something that's easy and quick," said Gary Lauer, CEO of eHealth. "They don't want to pick up the phone, they don't want to do paper applications."

Wendy Gonzalez sits with an insurance agent in Miami as she purchases a health insurance policy under the Affordable Care Act on March 20, 2014.Getty Images

EHealth did not disclose total enrollment tallies, making it impossible to compare with government exchange information. More than 5 million people have enrolled in Obamacare plans via public exchanges, officials said last week. Other web brokers, including GoHealth and GetInsured, have not broken out demographic data for enrollments this year.

Before the Oct. 1 launch of the exchanges, government officials had wanted upward of 40 percent of enrollments to come from young adults. That's because those people are on average healthier than older enrollees, and less apt to use health benefits from the insurance plans. Insurers fear that if not enough young adults enroll in a plan, Obamacare will descend into a "death spiral," where older, sicker customers will use benefits exceeding the premiums paid by all customers.

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Because of such fears, the Obama administration has been engaged in an aggressive marketing effort in recent weeks to get more young adults to buy insurance before Monday's enrollment deadline. As part of that push, Health and Human Services Secretary Kathleen Sebelius visited Montclair State University in New Jersey on Monday to encourage young people to use an enrollment assistance center open on the campus every day until the close of enrollment.

Brian Mast, an eHealth spokesman, said "we don't have any conclusive evidence" why the Web-based broker has outpaced government exchanges when it comes to young adults.

But Mast said the company has a "very streamlined, user-friendly online shopping experience." He also noted that young adults have long been a big part of eHealth's customer base. Last year, before the launch of Obamacare plans, more than 50 percent of eHealth customers were young adults.

The company has since has seen an increase in the percentage of 55- to 64-year-old customers, which Mast said could be the result of those customers no longer being barred from or priced out of many private individual insurance plans because of pre-existing medical conditions. Obamacare prohibits insurers from discriminating against people with pre-existing conditions.

Paul Keckley, a managing director at the consulting company Navigant, said, "I'm not surprised by eHealth's success" with young adults.

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