Reform Law Could Extend Insurance to 13.7 Million Young Adults

Young adults between the ages of 19 and 29 have represented one of the largest segments of the U.S. population without health insurance—accounting for up to 30% of the 46 million uninsured people under age 65. But this could be changing soon as many of the 13.7 million currently uninsured young adults gain coverage under the new healthcare reform law, according to a new study from The Commonwealth Fund.

"This is a graduation gift to many young adults," said Sara Collins, PhD, the lead author and Commonwealth Fund vice president for affordable health insurance. In particular, the report found that 42% of young adults who were covered under their parents' employer plans lost or had to switch their health insurance when they graduated from or left high school; of that group, 46% were uninsured for two years or more.

In addition, 75% of young adults who were insured under their parents' employer plans lost or switched their health insurance when they graduated from or left college. Of those that had a gap between losing and gaining coverage or were uninsured after college, 23% were uninsured for two years or more.

She noted that while young adults are relatively healthy, the health and financial consequences of such high rates of uninsurance were "substantial." In a Commonwealth Fund Survey of Young Adults from last year, it was found that 76% of these uninsured young adults were not getting needed care because of cost.

Nearly a third (32%) of uninsured young adults and 46% of uninsured young adults with chronic health problems reported that their condition even worsened in the last 12 months because they did not get the healthcare they needed soon enough. In addition, despite high rates of avoided care, nearly 60% of young adults who had been uninsured in the past year reported problems paying medical bills—more than double the rate of those who had insurance all year.

As proposed by HHS, the new rule addressing parental coverage would take effect on the first day of the first plan year beginning after Sept. 23 of this year. However, 65 health plans—including large national plans such as WellPoint, Aetna, UnitedHealth Group, Kaiser Permanente, and Blue Cross and Blue Shield plans—have volunteered to put the requirement into effect now so gaps in their coverage are avoided.

Also, major expansion in eligibility for Medicaid for adults—plus premium and cost sharing subsidies available for comprehensive private health benefits—in 2014 will have a major impact on young adults' to obtain health insurance, Collins said.

The report also found:

• More than half (52%) of uninsured young adults are in families with incomes that will make them newly eligible for Medicaid under the new law.
• About 29% are in families whose incomes will qualify them for health insurance premium subsides. This means that they will have to spend no more than 3% to 8% of their income on health insurance premiums.
• Also, 12% of uninsured young adults are in families whose incomes will qualify them for health insurance premium subsides so that they won't have to spend more than 9.5% of their income on premiums.