Twenty-somethings and the health care overhaul: What’s in it for them

WASHINGTON – The young invincibles. That’s what the insurance industry calls them.

They’re the 13.7 million Americans under 30 who don’t have health insurance because, they firmly believe, they just don’t need it. Why waste money on something they’re too healthy to use?

In the debate over health care, lawmakers and industry experts agree that persuading this statistically healthy demographic to jump into the insurance pool would bring down costs for the broader population. But for young adults to make the leap, health market experts and youth advocacy groups say, Congress needs to focus more on affordability than invincibility.

Young adults are more likely than other age groups to work low-wage, entry-level jobs that don’t offer health insurance, according to the Kaiser Family Foundation. As a result, Americans aged 19 to 29 have the highest uninsured rate in the United States.

“Do I really want to pay $200 a month so I can get antibiotics whenever I catch a cold?” asked 30-year-old Will Mohring, a Washington restaurant manager who makes about $45,000 a year.

Mohring has been uninsured for about a year. He said his decision to forgo insurance was eased by the security of having good family genes and the burden of $400-a-month student loan payments.

“I don’t think not having health insurance is a good thing,” he said. “I think if it was affordable – and that’s the key, if it was affordable – I would definitely have it.”

Insurance industry experts say it’s important to bring young people like Mohring into the system because they’re healthy and don’t need costly medical care. Their premiums would help subsidize older, less healthy people in the insurance pool, thereby bringing down average costs.

That’s one of the reasons why the health care bills circulating in Congress would require most Americans to get health insurance or face a fine.

“The plan is basically intended as a tax on young people to help lower the cost for others,” said Martin Feldstein, a conservative economist who served as President Ronald Reagan’s chief economic adviser.

But 27-year-old Aaron Smith, co-founder of the ironically named Young Invincibles youth advocacy group, encourages his peers to take the long view of health care.

“I think young people can accept the idea that it’s okay for us to pay a little more now to, you know, make sure that the system works well in the long term,” Smith said. “There will come a time when we are older, and we are sicker, and then the system will take care of us.”

Many of the health care overhaul provisions in Congress would affect young Americans, and a few are targeted at that demographic.

Two bills pending in Congress would let young adults piggyback on a parent’s insurance through their mid-20s, well past the typical 19-year-old cutoff.

Proponents say this would afford young workers and recent college graduates a measure of stability during their early professional years, when they’re more likely to work for employers who don’t offer health insurance.

The House-passed bill would require insurance companies to offer dependent coverage until age 27. A similar Senate measure would extend coverage to age 26.

“I think that takes a load off a lot of college students’ shoulders,” said University of Maryland senior Brittany McGrath, 22. She’ll be dropped from her father’s insurance shortly after graduating in December, which she said will add stress as she begins job hunting.

A recent study by the Commonwealth Fund suggests that raising the age of dependent coverage could insure more than 2 million young adults, albeit for a minimal hike in their parents’ monthly premium.

But the plan would leave out low-income young adults whose parents lack insurance themselves, said Karyn Schwartz, senior policy analyst at the Kaiser Family Foundation.

“It’s not a panacea,” Schwartz said.

Of all the health care proposals circulating in Congress, experts say the one likely to cover the most uninsured young adults is a massive expansion of Medicaid, the federal-state government health insurance program for the poor.

The Senate Finance Committee plan would open Medicaid to anyone making less than $14,400, which could encompass 7.5 million of the young and uninsured, according to Kaiser. The more generous House bill, meanwhile, sets the threshold at $16,200 a year, which could bring in about 8.4 million young adults.

All of the health care proposals would help ease the blow of an individual mandate by providing government subsidies to people who make less than 400 percent of the federal poverty level — about $43,300 in 2009.

The subsidies could be used to buy insurance in newly created government-regulated marketplaces called exchanges in which shoppers could choose among privately sold plans that meet new coverage requirements set by the government. A government-run insurance option also may be part of the final bill.

But Smith’s group is pushing for subsidies to be increased so that people making less than 400 percent of the federal poverty level wouldn’t pay more than 8 percent of their incomes in premiums. The most generous proposal in Congress caps premiums at 12 percent.

For a young person making $30,000 a year, that’s a difference of $1,200.

But Smith acknowledges raising the caps could be a tough sell politically.

The Senate Finance Committee’s health care bill is the only one that includes a plan designed specifically for young people – that is, if they want it.

The so-called “Young Invincible” plan, which would offer catastrophic insurance to people younger than 26, is the least comprehensive proposal being considered by Congress that would still meet its minimum coverage requirements.

The plan would come with a high deductible, while covering the bare minimum of preventative care, including immunizations and some cancer screenings for women.

Twenty-five year-old Zachary Kolodin, who runs a nonprofit start-up in Washington, holds a similar catastrophic plan. But he said it does not cover regular doctor visits or medicine to treat his asthma, so he’s forced to go without.

“I’m just not getting the care,” Kolodin said. “I’ll probably go to the dentist at some point, but I haven’t been to the dentist since I got this (health plan) because it is a pretty major out-of-pocket expense.”