Health Insurance Help On The Way For Young Adults
His college diploma came with a price. He promptly lost his health insurance two years ago when he graduated from American University in Washington, D.C. Today, like so many twenty-somethings in Hollywood's shadow, Biscotto works at jobs lacking health benefits.
He paused a moment when asked if he had emergency-only health insurance.
"I have car insurance," he said. "Does that count?"
Now, bona fide health coverage may be within reach for Biscotto and hundreds of thousands of other uninsured young adults.
A provision in the new federal health reform law may allow him, and others age 19 through 25, to return to their families' plans as dependents until they turn 26. Currently, many of them lose coverage when they turn 19, although full-time students often can keep it until age 23.
Biscotto hopes to be added to his mother's health insurance policy in January.
For many parents and their adult children, navigating the new benefit is proving daunting. In fact, spreading the word is one of the key challenges facing insurers, employers, schools and health care providers as they implement the new "under 26er rule" in the 2010 federal Affordable Care Act.
Many young adults interviewed at random in the past three weeks in Los Angeles area retail stores, campuses and coffee shops said they were unaware of the new rules, which formally kick in Sept. 23 and will begin showing up on many policies starting Jan. 1, 2011.
Others who have heard about the rules are scrambling to learn the details, including Josh Hill, 23, of Thousand Oaks, who came off his father's insurance after his college graduation.
"When TV signals were switching to digital, you saw hundreds of TV commercials every day letting you know what was up," Hill said. "Meanwhile, millions of people have changes to their health care and it's hard to find out anything. Most of what I know, I have learned from Google searches."
Under the old rules, many young people who no longer qualified for their families' plans went uninsured as they searched for jobs, studied part time or, like Biscotto, worked in jobs without health benefits. Fully 30 percent of Americans age 19 to 29 lack health insurance.
"The rate of uninsured in this age group is really high," said Sara R. Collins, vice president for affordable health insurance at the Commonwealth Fund, a health policy foundation. The two main reasons young adults are bumped from their parents' policies, she said, are that they don't go on to college or they graduate from college.
Some of them struggle to find insurance on their own, according to a Commonwealth Fund survey of 19- to 29-year-olds who went to college and had insurance for most of their college years.
The survey found that 28 percent lost coverage when they graduated, and another 39 percent switched to another source of coverage. In those two groups, 40 percent went without insurance for at least a year, and 27 percent went without it for two years or more.
The sagging economy has made matters worse, as new high school and college graduates struggle to find permanent jobs or even internships with pay.
For young adults fortunate enough to find jobs with benefits, many have found themselves first in line for layoffs, said Shana Alex Lavarreda, director of health insurance studies at the UCLA Center for Health Policy Research. She estimates that more than 1 million Californians in the 18-to-25 age group are uninsured.
The new federal mandate is expected to significantly reduce that number as it rolls out in the next year. It will have added impact in California, which, unlike 37 other states, lacks its own law extending parents' benefits to young people.
Nationwide, an estimated 1.2 million young adults will gain coverage under their parents' policies in 2011 alone, including 650,000 who were uninsured, federal officials say.
Her lack of insurance concerned her mother, Karen Walsten of Lake Elsinore, especially since Rebekah is asthmatic and so allergic to insects that when an ant bit her, her eyes swelled shut. That means inhalers for her breathing and Epi-Pen injectors to prevent severe allergy reactions.
So when Karen Walsten heard about the new under-26er rule, she moved swiftly and got Rebekah back on her employer's health insurance plan.
"It was very easy for me. All I had to do was verify her age with her birth certificate and fill out a form," she said.
The expanded benefit is not a panacea for all young adults who lack insurance, experts warned.
--It hinges entirely on their parents' access to health insurance, either through an employer or a plan they purchase on their own, leading some to label the benefit as one targeting families who are middle- or upper-class. That plan can't be an individual policy but one that provides coverage to dependents.
--Parents who do qualify may have a hard time deciphering when and how they can add or keep their children on their plans, since insurance companies and employers have set very different timelines.
--Young adults whose parents are unemployed and lack insurance are out of luck. So are those whose families are on Medi-Cal, which cuts off benefits to children when they turn 19, leaving most of them ineligible for public assistance.
--In many cases, those with jobs offering them health benefits cannot go back on their parents' insurance, even if the coverage is better.
In addition, some young adults may have to wait most of a year before their parents' policies offer the new benefit. Still, the wait may be worth it for those so hard pressed to pay for gas, rent and student loans that health insurance is a luxury.
"The good news is that it should be fully in force for next year's graduating class," said Anthony Wright, executive director of Health Access California, a statewide consumer care advocacy coalition. "That's a big plus."
Insurance companies say they are confident of a successful rollout.
"I think this will be a smooth transition by plans and by families," said Patrick Johnston, president and CEO of the California Association of Health Plans, which represents health insurers. "There's a lot of interest by parents in doing this."
Still, this new benefit, along with the rest of health reform, has a price, he said.
Federal officials estimate that the average cost for covering a young adult on an employer policy will be $3,380 in 2011. How much of the higher costs will fall to employees will vary from policy to policy, but some with family coverage may not see any premium increase at all.
Some parents, however, are bracing for sticker shock.
They include Donna Edwards Foege, of Henrico, Va., who has purchased individual insurance policies for her 24-year-old son since he was in college.
"The average family has always had the option to purchase health insurance coverage for their young adult children, college or not, if they were truly interested in providing it for them," she said.
Her son's current plan costs $101 per month under Anthem Health Plans of Virginia. She realized that it was less expensive to buy an individual plan for her son than to add him to the family's group plan. Adding her son under the new federal rule would actually boost the bill for his insurance to $281 per month, she said.
"I would suggest to parents everywhere to shop around for affordable coverage for their adult child," Foege said.
Bobbie Reinecker of Katy, Texas, wishes that the new rule had been in effect when her daughter lost coverage after graduating from college. Instead, her daughter found a job with insurance.
"It would have been great if we had had the option to keep her on our policy for that short amount of time, but no dice then," Reinecker said.
Parent Walter Reeves of Cheektowaga in western New York is grappling with how to insure two daughters in their early 20s.
His younger daughter, 21, is still covered under his small employer's health insurance plan, which costs him a total of $898 a month.
But that plan currently halts benefits at age 23 for adult children, meaning that his older daughter, 24, is not covered, even though she is still a senior in college. So Reeves has paid an extra $1,000 this year for her separate insurance plan.
Now, with the new rule, he may be able to insure both daughters on his plan. He anticipates a total of $1,010 per month for his employer-based plan, or $112 more than he does today-and more than he is paying now to insure his 24-year-old daughter.
But Reeves said he is glad to have the peace of mind that if his daughters need it, they will have access to his plan until they turn 26. He is looking forward to the year 2014 and the launch of alternative ways to purchase health care.
"The system is clearly broken, and I'm glad some have worked toward repairing it instead of ignoring it," Reeves said.
Federal rules require insurers and employers to give written notice of the change to employees. Aetna, for instance is including information in its open enrollment packets and in renewal materials for individuals who purchase insurance on their own, said spokeswoman Anjanette L. Coplin.
For some, that's already happened. Ruth Frantz, 25, a USC graduate student, had been on and off her parents' insurance plan since graduating from college, taking a full-time job and then re-enrolling in school.
In June, her father received an e-mail from his employer, stating that it was extending coverage to age 26. She filled out a dependent form and was accepted.
Sapna Sanghani, 24, of San Diego, a recent University of Arizona graduate now looking for a job, initially thought the new rule required young people 25 and under to be in college to qualify for their parents' insurance.
"I'm going to have to tell my dad that it doesn't," Sanghani said. "He'll be really happy to know this."
With reporting from Neon Tommy staffers Roselle Chen, Paresh Dave, Olga Khazan and Callie Schweitzer.
This project represents a partnership between Neon Tommy and the California HealthCare Foundation Center for Health Reporting. The Center is an independent news organization devoted to reporting about health care issues that concern Californians. It is headquartered at the University of Southern California's Annenberg School for Communication & Journalism and funded by the non-profit, nonpartisan California HealthCare Foundation. Deborah Schoch is a senior writer at the center; Diya Chacko is a reporting assistant.