April 23, 2009
Sara R. Collins
S. R. Collins,Young and Vulnerable: The Growing Problem of Uninsured Young Adults and How New Policies Can Help, Hearing on "Health Insurance Options for Young Adults," Invited Testimony, New York City Council, Committee on Health, April 23, 2009.
Thank you, Mr. Chairman, members of the Committee, for this invitation to testify on health insurance options for young adults. The Committee is to be commended for exploring ways to stem the growing tide of uninsured young adults. Adults ages 19 to 29 are among the largest and fastest growing segment of the population without health insurance in the United States. There were 13.2 million uninsured young adults nationwide in 2007, according to the latest available Census data. There are an estimated 750,000 uninsured young adults in the state of New York out of approximately 2.6 million uninsured residents under age 65. Young adults are disproportionately represented among people who lack health insurance, accounting for nearly 30 percent of the 45 million uninsured people under age 65, even though they comprise just 15 percent of the population.
Why Do Young Adults Become Uninsured?
- The most gaping hole in our voluntary, employment-based health insurance system occurs when people do not have access to employer coverage and have incomes that are too high to qualify for Medicaid and the State Children’s Health Insurance Program (SCHIP).
- The individual insurance market has proven to be a largely inadequate substitute for employer group coverage because of underwriting in many states and the fact that people face the full cost of the premium.
- Young people making the transition from childhood to adulthood fall into this gap in greater frequency than any other age group.
- Young adults are at risk of losing access to employer coverage or public insurance programs at two critical transition points: nineteenth birthdays or graduation from high school, and graduation from college.
Critical Transition Points: 19th Birthdays and High School Graduation
- Young adults covered as dependents on their parent’s employer policies often lose their eligibility for that coverage at age 19 or graduation from high school, particularly if they do not go on to college. Among employers who offer coverage, nearly 60 percent do not insure dependent children over age 18 or 19 if they do not attend college.
- Similarly, Medicaid and SCHIP reclassify all teenagers as adults on their 19th birthdays. Most low-income young adults are ineligible for Medicaid, since eligibility for adults in most states generally is restricted to very-low-income parents or disabled adults.
- As a result of these public and private insurance rules, uninsured rates jump sharply at age 19, rising from 11 percent among children age 18 and under to 29 percent among those ages 19 to 29. Low-income young adults are particularly at risk of losing coverage: among those in families with incomes under poverty, more than half (51%) are uninsured, compared with about one of five (19%) low-income children age 18 and under.
- Young adults who enroll in college full-time when they graduate from high school are the most likely in their age group to have insurance coverage, primarily because they are able to maintain eligibility under their parents’ employer’s policies. Some full-time students also gain coverage through plans offered by universities or through the individual insurance market.
- According to an analysis of the Survey of Income and Program Participation (SIPP), among all young adults graduating from high school, three of 10 are uninsured for some time in the year following high school. Nearly 2 in 5 young adults who graduate from high school but do not go to college are uninsured for some time during the year following their graduation—more than twice the rate for young adults who attended college.
- For young adults entering the labor market without the benefit of a college education, the jobs available are those that are least likely to have health benefits—jobs that pay low wages, are with small companies, or are part-time or temporary.
Critical Transition Points: College Graduation
- Among young adults who go to college, the year following their college graduation also can be perilous with respect to health insurance coverage. Coverage available to them as students either through a parent’s employer or a student health plan is lost upon graduation.
- As new entrants to the labor force, albeit with a college education, they confront hazards that reduce their likelihood of having coverage similar to those faced by high school graduates: waiting periods, temporary positions, lower-wage jobs, employment in small firms, and job turnover.
- Of those college students who graduated during 2001-2003, 34 percent were uninsured for at least part of the time in the year following graduation, with 13 percent uninsured for six months or more.
What Are the Demographics of Uninsured Young Adults?
- By far, the young adults most at risk of lacking coverage are those from low-income households. Of all uninsured young adults ages 19-29, more than 7 in 10 (72%) have household incomes of less than 200 percent of poverty.
- Young adults in low income households are both more likely to experience some time uninsured and to go without coverage for long periods of time. In the analysis of the SIPP, 80 percent of young adults 19-23 with incomes under 200 percent of poverty level were uninsured for at least part of a three-year period; half (50%) were uninsured for 13 months or more.
- Nearly half of uninsured young adults are white. But Hispanics and African Americans are both at greater risk of being uninsured than white young adults: 36 percent of African Americans and 53 percent of Hispanics ages 19 to 29 are uninsured, compared with 23 percent of whites in that age range.
- Hispanics and African American young adults are at high risk of being uninsured at any time and for experiencing long spells without coverage. In the SIPP analysis, 82 percent of Hispanic young adults ages 19–23 were uninsured over a three year period and 19 percent were uninsured for the entire time period, four times the rate of white young adults.
What Are Consequences of Going Without Health Insurance for the Health and Economic Security of Young Adults and Their Families?
- While young adults are on average in better health than older adults, losing insurance disrupts their access to the health care system, introduces barriers to care when it is needed, and leaves young adults and their families at risk for high out-of-pocket costs in the event of a serious illness or severe injury.
- Health risks that are prevalent among young adults include:
- Twenty-eight percent of 18–29 year olds are overweight, and 24 percent are obese. Over the past 30 years, obesity among this age group has increased three-fold.
- There are 3.5 million pregnancies each year among the 21 million women ages 19 to 29.
- One-third of all HIV diagnoses are made among young adults.
- Injury-related visits to emergency rooms are far more common among young adults than they are among either children or older adults.
- The Commonwealth Fund Biennial Health Insurance Survey has consistently found that uninsured young adults are much more likely to go without needed care because of costs than are insured young adults: two-thirds of young adults ages 19–29 with a time uninsured in the past year, because of cost, either had failed to fill a prescription, not gone to a doctor or specialist when sick, or skipped a recommended medical test, treatment, or follow-up visit.
The survey also found that uninsured young adults are far less likely than those with coverage to have a regular doctor: 2 in 5 uninsured young adults ages 19–29 had a regular doctor, compared with 4 in 5 of those who were insured all year.
- Nearly half of uninsured young adults in the Commonwealth Fund survey reported problems with medical bills including having trouble making payments, being contacted by a collection agency because of inability to pay bills, significantly changing their way of life in order to pay medical bills, or paying off medical debt over time.
New Policies to Expand Coverage to Young Adults
- Federal or state action to expand affordable, comprehensive health insurance to all would help ensure that young adults would avoid gaps in their health insurance when they make the transition from childhood to adulthood.
- Massachusetts has led the nation on expanding health insurance to all and has included policies targeted to ensure that young adults stay enrolled.
In addition, 25 states have passed legislation that increases the age of dependency for young adults for purposes of private insurance coverage. New ages of dependency range from age 24 in four states to age 30 in New Jersey. Governor Paterson has proposed increasing the age to 29 in New York. Sixteen states have settled on age 25. All but four laws apply to both non-students and students. In general, these laws apply to plans covered under state insurance regulations and thus do not apply to self-insured employers.
- In the absence of universal coverage at the federal level, three targeted policy changes would help cover more young adults:
- Extend eligibility for Medicaid/SCHIP public coverage beyond age 18. This change would have by far the biggest impact on reducing the number of uninsured young adults. If extended to age 25, such a policy change could help the 3.6 million uninsured young adults ages 19 to 25 with incomes under 100 percent of poverty or the 7.6 million uninsured young adults ages 19 up to 25 with incomes under 200 percent of poverty.
- Extend eligibility for dependents under private coverage beyond age 18 or 19, as 25 states have done. Increasing the age to 23 could cover an additional estimated 1.4 million unmarried, dependent young adults with parents who have employer-sponsored insurance, and increasing the age to 25 could cover 1.9 million unmarried, dependent young adults. If the benefit requirement were extended to all family policies, with the dependency age limit increased from 19 to 23, the average premium for those plans is estimated to rise by about 3 percent. Because fewer young adults over age 23 would likely be covered under their parents’ policies as they join the workforce and gain other coverage, increasing the age of dependency from 23 to 25 is expected to result in an additional premium increase of about 1 percent.
- States could ensure that all colleges and universities require full-time and part-time students to have health insurance, and that they offer health insurance coverage to both.
The persistent rise in the number of uninsured young adults each year reflects the spreading weaknesses in the United States' voluntary, employer-based health insurance system. As a country we depend nearly entirely on employers to provide health insurance to working age adults and indeed more than 160 million workers and their dependents are covered under employer-based health plans. But the unabated growth in health care costs of the last several years has made it increasingly difficult for many employers, particularly small employers, to provide affordable health insurance coverage to all their workers. New entrants to the labor force, particularly those with low wages or who are in temporary positions, are at high risk of not being offered health insurance by an employer or not being able to afford it when it is offered. It is imperative that the nation move affirmatively to address a situation that has become tragic for millions of families by expanding affordable and comprehensive health insurance coverage to everyone.