Health Insurers Target Young Adults

Millions of twentysomethings are gambling on the chance that they won’t get in car accidents, be struck with appendicitis or encounter anything else that could send them rushing to the hospital. If they lose, they could be in a lot of financial pain on top of their physical pain.

More than 13 million young adults between the ages of 19 and 29 are uninsured, according to a report released Wednesday by the nonpartisan Commonwealth Fund. Representing 30 percent of uninsured Americans, more young adults are without health coverage than any other age group – and insurers are taking notice.

Because young people are generally healthy and don’t rack up big medical bills, they are attractive to insurance companies. In recent years several insurance providers in Colorado have rolled out plans specifically targeted toward twentysomethings. Offered by big insurance companies such as Blue Cross and Blue Shield and HumanaOne, the plans have high deductibles but low premiums, which insurers say makes sense for young adults who don’t regularly need medical care.

continued…Experts point to several reasons why young adults often lack health insurance. They lose coverage when they’re kicked off their parents’ insurance and they’re less likely to have jobs that offer it. Individual health coverage is expensive, and when you rarely need to visit a doctor, the high premiums just don’t seem worth it.

“Many young adults don’t feel that they need health insurance,” says Jeff Bontrager, Senior Research Analyst at the Colorado Health institute. “They don’t think it’s a priority.”

The people behind Tonik, an insurance plan from Anthem Blue Cross and Blue Shield, are trying to convince the demographic that health insurance can be affordable. The plan targets the roughly 80,000 Coloradans between the ages of 19 an 29 with no health insurance. Dressed in Tang orange, the Tonik Web site proclaims, “Here it is. Health insurance, straight up.” Three different plans target the “thrill-seeker,” the “part-time daredevil” and the “calculated risk-taker.” The plans cover four office visits a year, prescription drugs, emergency room visits and ambulance rides, all with reasonable co-pays.

“We did extensive consumer groups talking to young people and asking what they are looking for in a health plan,” says Craig German, regional sales manager for Anthem Blue Cross and Blue Shield.

But to offset the low premiums, subscribers must pay a $1,500 to $5,000 deductible, depending the plan, for hospital stays, surgery, X-rays and other tests.

That comes as a surprise to some young people, says Dede de Percin, executive director of the Colorado Consumer Health Initiative.

“These plans have very high deductibles, and people really need to know what they’re getting and be really smart buyers,” she says. “I’m not sure that that many young adults are that familiar with how insurance plans work. They think they might be covered and find out they’re not when it’s too late.”

But German says all the information is clearly presented on the Web site, where a majority of people apply for the plan. And, he says, a lot of parents are doing the research for their kids. If that’s the case, then those young adults might have someone to turn to when they have to pay a $5,000 deductible for surgery.

But not everyone can count on their parents for financial help.

Young adults need to take the time to understand health insurance and know what is and isn’t covered in different plans, de Percin says. Plans like Tonik might work for some people and not for others, she says.

“I think it depends on the young adult and whether they understand what they’re getting when they purchase this kind of product,” she says.

But German points to Tonik’s coverage of vision, dental and preventative care and says it’s not watered-down insurance.

“It’s a great plan,” he says. “It’s not a mini-net by any stretch. There are some plans that offer limited benefits. We have a $5 million lifetime benefit. It’s a comprehensive medical insurance package.”

German declined to provide enrollment numbers but says sales have been good.

“We’ve been very encouraged by the enrollment. It’s been going very well,” he says.

And, he says, about 60 percent of people signing up for Tonik were previously uninsured.

De Percin says that while decreasing the ranks of the uninsured is essential, “The solution needs to be bigger than high deductible, low service plan for young adults. It needs a bigger fix than that.”

Hopefully, she says, something will come out of the 208 Commission, which is studying health care reform in Colorado, that will better address the problem of skyrocketing health costs.

In addressing the problem of uninsured young adults, the Commonwealth Fund report recommends that states raise the age limit for eligibility for the State Children’s Health Insurance Program (SCHIP),  allow young adults to stay on their parents’ insurance longer and require colleges to offer health coverage to students.

But until such reforms come along, uninsured young adults don’t have many options.

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Kerri Rebresh

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