There is this myth that if young people don’t sign up on the Affordable Care Act exchanges the whole program would enter a death spiral. Since the law allows old people to be charged three times more than young people the age of the risk pool is not nearly as important as the relative health.

The Kaiser Family Foundation has crunched numbers. While there is some generational cross-subsidizing built into the system it is relatively small.Figure 1

This means that even if young people sign up at half the rate of other groups, “individual market plans would be about 2.4% higher than premium revenues.” This would result in modest premium increases in 2015 but nothing too extreme to handle.

What is more important is the relative health of the people who sign up.