Congratulations! Now Don't Get Sick!

It’s happened to people who work for me, it’s happened to people I love – heck, it happened to me.  It’s called Graduation Day.  It’s a time of celebration and a time of accomplishment.  But particularly in this economic climate, it’s a time of danger.  Congratulations!  Here’s your diploma!  And here’s your notice that you’re about to be taken off your parents’ insurance plan.  Now don’t get sick!

For recent graduates, it’s just one more thing to be stressed about.  You need to find a job to survive now, but you also need to find a job in order to be covered.  Presumably, your average college grad knows next to nothing about the high cost of insurance on the individual market.  She or he has never needed to know – they’ve been covered by their parents or through their university’s mandated health plan.  But most states only require insurance plans to keep you on until 18, 19 or 21, or perhaps until you graduate college.  Then it’s time to face the cold, cruel world.

It might seem like a “right of passage,” but calculations by the Agency for Healthcare Research and Quality done in 2005 found that over 38% of adults aged 19-24 were uninsured.  It’s the age band with the highest concentration.  I was in that range the first time I found myself uninsured – for only 4 weeks but, sure enough, it was 4 weeks when I found myself having slightly alarming fainting spells.  Second in line was 25-29 with 32% (the same study found that 19.5% of all ages were uninsured).  This group is often called the Young Invincibles, with the presumption being that they’re opting out of buying insurance so they can party on weekends.  Certainly that describes some of them.  But keep in mind the truly young and healthy are great prizes to the insurance industry, which is why there are so many “emergency only” or high-deductible plans, requiring the lowest of premiums but with minimal coverage.  They wouldn’t show up in this calculation of the uninsured, even though they’re clearly underinsured.  And yes, I was in this age group when I became uninsured the second time – even though I had a full-time job.

For the most part, young adults go without coverage for, well the same reasons as anyone else:  it’s not offered through their job, or they can’t afford it.  As Anthony Wright points out, “Most of the difference is not really about age or attitude, but income and job type.  Graduates who gain employment in this economy will likely find it in low-income, entry level jobs that are, relative to other jobs, less likely to offer health coverage. Even those graduates on professional tracks start at lower incomes. They may face months or even years to qualify for on-the-job benefits.”  Let’s throw in there that many college grads are facing tremendous economic pressures just by graduating – nearly two thirds of graduating seniors have student loan debt, and the average amount is over $23,000.

And they’re the lucky ones – they have a college degree.  Those with only a high school diploma are in a tougher spot.

It’s maddening that we haven’t fixed this.  During the campaign, Barack Obama proposed letting young adults stay on their parents health insurance plans until they’re 25.  This is similar to Massachusetts law, where they can be on their parents’ plan until they’re 26 (or until 2 years have passed since they were last claimed as a dependant) – a bill signed into law by Gov. Mitt Romney.  Gov. David Paterson in New York recently proposed taking it even further and letting young adults stay on their parents’ plans until they’re 29.  Doing so requires absolutely no further government spending and, for most families and employers, no cost hike above what they’re already paying.  Of course, it wouldn’t be enough to wipe out that dense band of the uninsured – after all, the number of families losing their coverage or being unable to afford the plan that they have now continues to rise.  But given the job market they’re facing, our young adults need it now more than ever.

(Photo credit: gadgetdude on Flickr.)