Health care dilemma for young people
Before passage of the Affordable Care Act, becoming an adult meant getting kicked to the curb when it came to health coverage.
“Our gift used to be, when people turned 19, was to take away their health insurance,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. “Turn 19 and we kick them out.”
If you were in college, you could usually stay on your parents’ insurance until you turned 22. But until health care reform came about, young adults who didn’t find jobs with health coverage or qualified for government insurance were often left uninsured and vulnerable to massive medical bills.
Now there’s a present awaiting young adults.
Thanks to the Affordable Care Act, commonly referred to as Obamacare, you may now be able to get insurance or continue to be covered under a parent’s plan up to the age of 26.
And this coverage is available even if you’re married, not living at home, attending school or are financially independent. Starting next year, young adults up to 26 can stay on their parents’ employer plan even if they have another offer of coverage through an employer.
The downside for some parents is that they might have to pay extra to keep young adult children covered. But at least they will have insurance. And, in just a few weeks, a new marketplace will open giving young adults, particularly those older than 26, another option for obtaining health insurance. Trust me, this is one shopping trip at www.healthcare.gov that you need to go on.
There is concern that not enough young healthy adults will purchase insurance, which will help offset the cost of those who are older and sicker and will need a lot of health care services. Some experts believe these concerns are overstated.
They note that insurance plans in the new marketplace will cover a core set of benefits such as hospitalization, maternity and newborn care, mental health and substance-use disorder services and prescription drugs.
With the help of trained personnel called navigators, insurance shoppers will be able to compare plans based on a number of factors including price and benefits. They’ll also be able to determine if they qualify for subsidies to help pay for the coverage.
When you’re young and healthy, you may think you can put off getting health insurance. Maybe money is tight and you figure this is something you can delay until you get older, like contributing to a retirement plan.
“Health insurance is something at the moment I feel I can’t afford,” said Josh Nece, 29, an uninsured restaurant server in Oakland, Calif.
Nece, who suffers from severe eczema, says with rent, transportation, student loan payments and other expenses, he couldn’t afford the cost of getting insurance on his own. But he needs insurance to help pay for the medication and doctor visits when his eczema breaks out. He says he often goes without treatment or medication because he can’t afford it.
He plans to check out the marketplace in his state. I’m going to follow up with him to see if he does.
“I’m pretty sure I’m going to get health insurance,” he says. “Going into my 30s, I know it’s one of the adult things I need to do.”
In June, Kaiser asked young adults whether they wanted and valued health insurance. The answer was a resounding yes, contrary to the conventional wisdom about young adults feeling they are invincible.
Still, for those who think they can wait, here’s something to ponder: A tumble off a skateboard could end up costing you $20,000, as it did for Pollitz’s 22-year-old son, who works part time in a day-care center.
“He hit a rock and the skateboard slid under him,” she said. “He broke his wrist.”
Pollitz said the bill was a “teachable moment.” Thankfully he was covered on his parents’ plan. Otherwise, “that would have been a financial catastrophe for him.”
It is stories like hers that makes Pollitz passionate about getting out the word to young adults to get health insurance. Although most young adults already have coverage, more than 19 million lack basic health insurance. In 2011, 27.9 percent of Americans ages 19 to 25 were uninsured. About the same percentage in the 25-to-34 age bracket also didn’t have insurance, according to Kaiser.
Some young adults might not get health insurance because the penalty for not purchasing it isn’t stiff enough. If the government determines that you are in the financial position to pay for coverage and you don’t fall under an exemption, you’ll have to pay a penalty for being uninsured when you file your federal income tax. The penalty starts at $95 annually next year for an individual and can go up to $285 for a family, or 1 percent of a family’s household income, depending on which is higher.
I like to believe Millennials are smart enough to recognize they can’t afford not to get health insurance. It’s a gift that can keep them not only healthy but out of medical debt.
Michelle Singletary is a financial columnist for the Washington Post.