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What Every Young Person Ought to Know About Healthcare


Young people are the least likely to be insured, the least likely to need healthcare, and the least talked-about group in the healthcare debate. Yet we may end up paying dearly for healthcare reform. If you’re young and healthy like me, you don’t spend a lot of time thinking about healthcare. And that’s probably alright—you’re young and healthy. But there are just a few things that every young adult really does need to know about healthcare:

Over 47 million Americans lack health insurance; 39 percent of the uninsured are between the ages of 18 and 34, according to Qvisory.

It makes sense that young people are the least insured. We’re more likely to be in school or working part-time and not have access to employer-sponsored health insurance. We don’t qualify for government programs like Medicaid. Our incomes are low, so we can’t afford even the least expensive policies. Finally, because we’re young and healthy, many of us simply feel invincible and like we don’t need insurance.

Half of the states extend the age that dependents may be covered by their parents’ insurance beyond age 19.

If you live in one of these 25 states, your parents may be able to include you on their health insurance plan.

Medical bills are the leading cause of consumer bankruptcy.

According to a study by The New England Journal of Medicine, “illness or medical bills contributed to nearly two thirds, or 62 percent, of all bankruptcies in 2007—before the major impact of the housing collapse and current economic downturn”. If you get sick or injured and don’t have insurance, there’s a good chance your medical bills will drive you into bankruptcy. But the problem doesn’t stop with the uninsured. According to this related Consumer Reports article,

Just over three-quarters of people who suffered a bankruptcy due to illness were insured at the onset of their health issue. But the total out-of-pocket medical costs for those who had insurance when they became ill was a steep $17,749, on average. For those who didn’t have insurance, the average debt was $26,971.

Young adults may pay for a big part of healthcare reform.

Again, a big reason young people are under-insured is because we can’t afford coverage. The low-cost insurance options Washington is proposing as part of healthcare reform will help, but they don’t solve this problem entirely.

First, since young adults are healthier and less costly to insure, our premiums will subsidize the care of the older and the sicker. But most critically, if the government mandates that Americans have health insurance, we may have to pay a fine if we don’t purchase a policy. According to this Washington Post article:

[One bill] would fine individuals who do not purchase coverage. An early draft of the proposal set the penalty at $750 or $950 per year for single people, depending on income. But according to various insurance experts, even the least expensive plan under the bill could cost more than $100 per month, making it cheaper for people to pay the fine than to buy insurance.

In effect, this may not solve young Americans’ healthcare problem at all: it simply taxes those that continue to go without healthcare while providing less expensive (but potentially still unaffordable) plans.

You can buy health insurance on your own, right now.

Many young people don’t realize that you can buy health insurance even if you don’t get it through your employer, college, or parents. You probably can’t afford “Cadillac” health insurance plans like those offered by some employers, but you may be able to afford what are called “catastrophic” plans that will cover you should you get into an accident or suddenly become sick. Two resources can help:

What do you think? Do you think the government should require Americans to buy health insurance or pay a fine? What would you do? Are you young and dealing with extraordinary healthcare costs? Were you insured? Please share your story in a comment.

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. “Our incomes are low, so we can’t afford even the least expensive policies.”

    That may be true for some but many people are surprised to find out that policies for those under the age of 30 are usually very very cheap – especially if one is healthy and is willing to purchase a plan with a high deductible.

    Many plans are available from top rated companies like United Healthcare, Aetna, Blue Cross, etc for as low as $50/month in most states.

    The lower your income is then the more important having major medical health insurance is because even a semi large bill like a $35,000 bill for a broken bone without health insurance can can bankruptcy. However, with a solid health insurance plan all you have to pay out of even a million dollar bill is likely to be in the $5,000 range.

  2. Please note that depending on the type of health plan offered (fully insured vs. self-insured), the plan may be exempt from following state rules. So even though the dependent age requirement might be 26 in Colorado, if your parent’s plan is self-insured, it most likely won’t follow the state rules.

  3. In my 9 years of being employed after college, I’ve seen my employer-sponsored health care go from free (I had no monthly cost passed on to me from my employer and no copayment for anything!) to a monthly cost PLUS needing to satisfy a $2500 deductible before insurance covers anything. If my husband and I had children, we’d be paying $500 a month for insurace, BEFORE satisfying a hefty deductible upwards of $3,000. I understand that it seems “unfair” to make young people purchase health care coverage, but instead the costs keep rising (because of many reasons that I can’t even go into here.) I assume one of those reasons is that those of us who are insured are paying for the uninsured who are having medical emergencies. What’s fair about that?

  4. Young people’s premiums will skyrocket under healthcare “reform”. The goal of the mandate is to force the young to pay a wildly disproportionate share of the costs to subsidize the old and/or sick, relative to what they use. This is primarily because the ratio between what the old vs what the young pay will be restricted to 3-1, or 2-1. On top of that, high deductible/low premium plans will be legislatively outlawed because of minimum benefit requirements. For someone young and healthy, it will be like asking him/her to pay insurance on a BMW or Lexus when that person actually drives a Ford Escort. If my premiums are too high, I’ll opt out and pay the fine. If the fine is too high, I’ll make it my goal to utilize as many healthcare resources as possible, even if not medically necessary as I refuse to throw away large sums of money on a monthly basis and get very little in return. (*Also, The Washington Post estimate of the least expensive plan being $100 a month is pure fantasy. In actuality, the monthly premium will be significantly higher.)

  5. Getting a free quote online is like window shopping-buy a health plan before being absolutely sure about what the policy offers. Do a complete market research and then buy a policy.