Health insurers know the importance of signing up so-called "young invincibles" to their health plans, but many of these sought-after individuals are not interested—either because they can't afford health insurance or they simply think they don't need coverage.
Health insurance companies understand that having these low-cost prospective members paying into the system could decrease member health insurance costs across the board.
Young adults between the ages of 19 and 29 are one of the largest segments of the U.S. population without health insurance, according to The Commonwealth Fund's Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help. A whopping 13.2 million, or 29%, of young adults lacked health insurance coverage in 2007. Many of those young adults lost coverage at or after age 19 when they graduated from high school or college. In fact, turning 19 increased the uninsured rate nearly threefold, according to the report.
Young adults might think they don't need insurance, but The Commonwealth Fund thinks otherwise. Not having insurance creates barriers to care and leaves young adults and their families exposed to hefty out-of-pocket costs, according to the report.
There are also health reasons why young adults need insurance. Fifteen percent of young adults have at least one chronic health condition, including asthma, cancer, or diabetes; young adult mothers gave birth to 2.6 million children in 2007; and injury-related visits to emergency rooms are more common among young adults than any other group (1,453 per 10,000), according to The Commonwealth Fund.
How can health insurers and policymakers change this trend? Here are two ways health insurers can do it:
- Promote individual health insurance to both the young adults and their parents
Health insurers need to do a better job at promoting their offerings. This goes beyond creating a cute, fuzzy mascot to preach the importance of Acme Health Insurance. That may make young adults aware of you, but that still doesn't mean they know that they are eligible to sign up for those plans. They may view health insurance as something for their parents.
One way to promote your services to young adults and parents is knowing state dependent laws and reaching out to parents and children about individual health insurance options when the child reaches his or her late teens.
Now that you have informed them, it's time to take the next step. When the child reaches beyond the dependent age and loses coverage, the insurer should create a mechanism (phone call, e-mail, and/or traditional mail) to reach out to both the parents and young adults about their health insurance options. Many don't realize there is an individual insurance option available to them so it's up to insurers to tell them.
Not only would you benefit from gaining young adults as members, but your company could also acquire a life-long member.
- Make individual health insurance more desirable
OK, you have the young adults signed up. Now, give them what they want and in the form of communication they want.
This will mean investing in technology and allowing them to work with their health insurer on their own schedule via the Web; diving into the social media world of Facebook and Twitter; and creating applications that allow individualized communications with the young adult.
Everything is moving toward individualism. Young adults will expect it from their health insurers too. That's the way to reach them.
And here are two pieces of state legislation that could improve health coverage access to young adults:
- Increase the age that young adults can be considered dependents for insurance purposes
New Jersey and New Hampshire allow residents to cover their children under their health insurance up to the age of 30. Another 24 states have similar laws with less liberal age requirements. Most of them allow parents to cover their children until the age of 25.
States have created these laws because many young adults lose their parents' coverage once they graduate from college. The transition from schooling to the workforce often includes low wages and no health benefits and leaves many young adults without health insurance.
Providing a safety net by increasing the dependent health insurance age could resolve that issue.
- Allow mandate-lite health plans
I wrote about mandate-lite plans in March 2008. Some states have options that allow insurers to offer health plans with few state mandates, which reduces the costs of offering those plans.
There are about 2,000 mandated healthcare benefits and providers throughout the country, and those mandates increase healthcare costs by more than 50% in some states, according to the Council for Affordable Health Insurance.
Some of these mandates include: Services like hair and limb prostheses, bone mass measurement, and care for TMJ disorders; providers like dentists, optometrists, and marriage therapists; and covered persons such as non-custodial children and adopted children.
The benefit of mandate-lite plans is that they are low-cost options for young adults who simply want preventive and catastrophic coverage. The downside is that they might not cover certain services, such as maternity care. So educating young adults about these plans is critical if your state provides mandate-lite options.
Those are a mere four ways that health insurers and policymakers can tackle the issue—short of implementing a federal individual mandate that would require all Americans to have health insurance. All four ideas could be implemented without much problem or capital.
In a time when the industry is facing fewer employer-based members and a potential public insurance option, think about how the infusion millions of uninsured young adults would benefit health insurers. These proposals could add new members who are lower cost than the general member population—especially elderly and sick members.