An article on the usnews.com site about the Patient Protection and Afford Care Act (ACA) reported that “the participation (enrollment) of the prized ‘young invincibles’ . . . has been elusive.” (“Young invincibles” refers to 18- to 34-yearolds who don’t buy health insurance because they expect to remain healthy.) The article noted that the number of people with preexisting conditions enrolled in the health
insurance marketplaces has risen relative to the number of young invincibles and asserted that this “imbalance has caused premiums to rise, which can also cause some healthier beneficiaries to avoid plans.”
a. Why is the participation of young invincibles important to the success of the ACA health insurance marketplaces?
b. Why would an increase in the ratio of people with preexisting conditions to young invincibles result in increases in premiums? What economic problem that occurs in the market for health care does this increase illustrate?
c. If the ratio of people with preexisting conditions to young invincibles continues to rise, what will be the consequences for the health insurance marketplaces?