Why youngsters are uninsured and self-insured

Why do 13.7 million people between 19 and 29 self-insure rather than buy health insurance that would protect them against financially catastrophic losses?

Are they dumb, poor or illegal immigrants and free riders who figure that if they get cancer or have a major accident, physicians and hospitals will take care of them regardless of whether they can or will pay their medical bills?

The Commonwealth Fund, which has been an advocate of universal health insurance for years, has published a new study of the questions many ask about the self-insured young people who don’t buy health insurance.

A close reading of the 26-page report shows that a high percentage of the young uninsured are from poor households, which are poorly defined in the report. And high percentages are African-Americans and Hispanics. Those groups tend to be less educated than the rest of the population.

Simply put, poor educations make it less likely that young people will find good jobs and will be able to or willing to buy health insurance at any price. A table included in the report shows that among the uninsured who are 19 to 29 years old:

• 56% have less than a 12th grade education
• 38% have completed 12th grade and high school
• 13% have more than high school educations
‚Ä¢ 14% have a bachelor’s degree or better (They most likely are self-insured for short times.)
‚Ä¢ 18% are full time students (They include kids who can buy insurance but don’t.)
• 27% are part-time students
• 34% are not students

In short, more than 40% of the uninsured young adults are poor. When kids turn 19, many lose the coverage they had under their parents’ health insurance policies and don’t buy insurance when they go to college or take jobs with employers that don’t help them buy health insurance.

The report says,

A 2004 Commonwealth Fund study found that
among employers who offer coverage, nearly 60 percent do not insure dependent children
over age 18 or 19 if they do not attend college.

And:

Roughly 38 percent of public four-year universities and colleges and 79 percent of private
four-year universities and colleges require students have health insurance as a condition of
enrollment.

One has to wonder about the numbers related to households with below poverty level incomes. How many of these “households” include working parents and how many are kids living on their own? The report doesn’t address this directly, but it notes that when kids turn 19, they lose coverage under Medicaid and SCHIP. As a result, 30% of those 19 to 29 are uninsured compared with 12% of those who are under 18.

The report says:

Thirty-nine percent of part-time and non-students
ages 19 to 23 are uninsured, compared with 17 percent of full-time students (Figure 3).
Young adults who opt to enter the labor market rather than go to college are unlikely to be
eligible for coverage under their parents’ policies, and may have difficulty finding a job
with health benefits. For those entering the labor market without the benefit of a college
education, the jobs available—positions that pay low wages, are with small companies, or
are part-time or temporary—often come without health benefits.6 The Commonwealth
Fund Biennial Health Insurance Survey (2007) found that 40 percent of all workers ages 19
to 29 who earn less than $10 per hour are uninsured.7 More than one-third (36%) of
workers between ages 19 and 29 have jobs that pay less than $10 per hour.

The job hopping that is common among entry level workers makes it harder for them to buy health insurance, according to the report.

It’s also important to ask how many of the 13.7 million self-insured are illegal immigrants? The report doesn’t directly answer that question, but it says:

Nearly half of uninsured young adults are white. But Hispanics are disproportionately
represented among the young and uninsured. While Hispanics represent 19 percent of
adults ages 19 to 29, they represent 33 percent of uninsured young adults (Figure 2).
Hispanic and African American young adults are at greater risk of being uninsured than are
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 (Table 1).

Of course, not all young HIspanics are illegal immigrants. Many are American-born citizens whose parents are illegal immigrants.

And how many young adults are unemployable because of substance abuse, mental health, physical health and other problems? About 15% of Americans of all income groups are substance abusers or have mental health problems, which may make them unemployable and difficult to insure.

The report enumerates some of the reasons young adults need health insurance:

• 14 percent of adults ages 18 to 29 are obese. In the 1990s, obesity increased by 70
percent in this age group—the fastest rate of increase among all adults.16
• 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 among either children or older adults.
• More than 20,000 people with congenital heart disease reach their 19th birthday
each year.

I have a problem with studies like this because they tend to be headline grabbers, and headlines, which are all that many people read and remember, mislead. Few dig into a report and try to figure out whether it’s important or not.

The Commonwealth study is important and interesting, but it glosses over the real problems, which include our lousy educational institutions and the large number of illegal immigrants in the country.

I agree with the report’s recommendations that health insurance regulations could require that people should be covered under their parents’ policies up to the age of 25 or 30. But I think only the parents should pay the higher premiums that would cover the cost of the extended coverage.

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