When Parents’ Policies No Longer Provide Coverage, Young Texans Struggle to Find Health Insurance They Can Afford
Sarah was covered through her father’s job-based insurance. The plan dropped her in early 2009 because she was 23 and no longer a full-time student. She did not find out that she’d lost coverage until she went to the pharmacy to pick up a prescription. While her parents scrambled to get Sarah enrolled in COBRA coverage, she had to pay for three months of medication out-of-pocket as her COBRA enrollment was getting sorted out, totaling around $1,000. After her COBRA was set up, it took more than six months for the health plan to partially reimburse her for those expenses. She now pays $300 a month for her COBRA coverage.
At the time, Sarah worked for a major clothing retail chain that offers health insurance to full-time employees. Sarah, who was working close to 30 hours per week, was not eligible because she was a part-time employee. Because Sarah had worked with the company for more than two years, she was eligible for the “benefit” of access to the company’s contracted health insurance agents, who could help her find her own individual health insurance policy with no contribution from the employer. Sarah filled out an application that included information on her health as well as a family medical history. The agents reported back that no insurance company was willing to write a policy for her. She does not know if it is because she has a pre-existing condition or because her family has a history of heart disease.
COBRA coverage is only available for 18 months. Sarah’s COBRA will run out in June 2010. She graduated from college last year and is hoping that she’ll be able to find a full-time job with coverage before June. But like millions of Americans, Sarah is struggling in this economy to find any full-time work, let alone a job with benefits. If she cannot get job-based coverage by June, Sarah and her parents are thinking of trying to find a catastrophic policy for her, even though it won’t cover her $330-a-month medication. Unfortunately, there’s no guarantee that an insurance company will offer her a catastrophic policy. Since she’s already been denied full coverage in the individual market, she may find that no company will sell her a catastrophic policy either.
How the Current System Fails Young Adults like Sarah
- Young adults often “age out” of previous coverage before they have full-time jobs that offer health benefits. Depending on how they were covered, young adults may lose coverage anywhere between their 19th and 25th birthdays, when they graduate from high school or college, or when they are no longer full-time students.
- Young adults are less likely than older adults to work for employers that offer coverage. And young adults are less likely to be eligible for their employer’s health plan, if one is offered. Young adults may not be eligible because the positions they hold are part-time or temporary, or they may be subject to a waiting period for new hires that can last several months or even a year.
- Like all people who do not have access to job-based coverage and must try to buy coverage in the individual market, young adults with pre-existing conditions can be denied coverage.
Sarah is one of millions of young adults who have “aged out” of their parent’s coverage but do not have access to their own job-based coverage. Young adults trapped in this position are left to try to buy health insurance in the individual market, where insurance companies can reject people with pre-existing conditions.
Top Three Ways Health Reform Will Help Sarah:
- Young adults will be able to stay on their parent’s health coverage until their 26th birthday. This gives young adults transitioning into the working world more time to get jobs that offer coverage before they get kicked off of their parent’s policy.
- Young adults and others who do not have access to job-based coverage will be able to buy good coverage through the new Health Insurance Exchange (just like members of Congress). Coverage in the Exchange will be subsidized so that it is affordable for people with low and moderate incomes. This will be important for young adults who find themselves in lower-paying, entry-level jobs as they graduate from high school and college.
- Insurers will not be able reject applicants with pre-existing conditions or set premiums based on a person’s health status.
For more information see Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help, by the Commonwealth Fund
We are in the same boat but my husband is not young but has a medical condition that requires medications and doctor visits. Since he was laid off from his job, he worked for a hsopital and had medical insurance while employed. When he was unable to work, I enrolled him in my medical insurance but due to a pre-exisitng condition and break in insurance my insurance does not want to pay the medical bills due to the pre-existing condition. We have appealed and appealed just making my husbands medical condition worsen and the bills growing and I contiue paying for medical insurance for him just incase a major emergency occurs the hospital can be paid. We need Health Reform to pass.
I am experiencing similar issues. I graduated December 2009 with my bachelors in Social Work and soon after was ineligible to remain on my parents’ insurance policy. My current employer will only keep me as a part time employee due to me moving for graduate school in 6 months so I am not eligible for full time employment status or benefits. With the passage of the Patient Protection and Affordable Care Act, I will be able to receive coverage on my parents’ policy and complete graduate school without the added stress of seeking only employment which will offer insurance coverage. I am very pleased with the passage of this bill and hope to work in the future toward further improvements.