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Young adults could return to family plans as 26 is new health care cutoff age
By Deborah Schoch and Diya Chacko
Posted: 08/28/2010 04:32:25 PM PDT
Tatiana Rangel, 20, of El Monte says that her life is "on hold."
She's waiting to hear if she's gotten into certain classes at Pasadena City College required for her major. She's waiting to hear if she's gotten a job at the new Yogurtland in Pico Rivera. And she's waiting to hear if she qualifies to get back on her parent's health insurance plan after being uninsured for more than two years.
A provision in the new federal health reform law may let her, and others aged 19 through 25, return to their families' plans until their 26th birthdays. Currently, many young people lose that coverage when they turn 19, although full-time students often can keep it until age 23.
Yet most young adults interviewed recently said they had never heard of the new rules, which formally kick in Sept. 23 and will begin showing up on many policies starting Jan. 1.
"I had no idea. It's awesome. I haven't had insurance for four years," said 25-year-old Rio Hondo College student Claudia Mendoza. "It's really expensive to get without a job, but it can be really expensive if you don't have it and something happens... If you break your leg or something you are (in trouble), who knows how much you are going to have to pay."
Mendoza, like many students at Rio Hondo, gets what limited care she can from the school's student clinic, usually amounting to medicine when she is sick. But she said she hasn't been to a doctor for a regular checkup in years.
One of the clinic's student workers, 27-year-old Marisol Llamas, said she can't wait to tell students about the insurance changes.
"They come in here all the time freaking out because they can't be on their parents' insurance anymore. They want to know what to do," Llamas said.
Spreading the word about the new benefit is one of the key challenges facing insurance companies, employers, schools and health providers as they implement the new "under 26er rule" in the 2010 federal Affordable Care Act.
"People are just confused about every aspect of this bill. We get a lot of people saying, `Really, how does this work?,"' said Sonya Vasquez, policy director at the Los Angeles-based Community Health Councils, a non-profit advocacy and education group.
Nevertheless, the rollout process is under way. A host of major insurance companies voluntarily jump-started the new mandate in June, keeping young adults on their parents' plans who might otherwise have been dropped when they left school.
Hundreds of thousands more young adults are expected to join in, including full-time students who were bumped off their parents' policies when they hit 23.
Kristin Honig, 25, of Alhambra, a master's degree candidate in criminalistics at nearby Cal State Los Angeles, was among that group. She purchased a low-cost "emergency plan" that offers limited coverage for only two doctors' visits a year.
But she worries about lacking full-scale health insurance, especially because a longtime friend who was uninsured had a disastrous snowboarding accident at Mammoth Mountain that left her overwhelmed with medical bills.
Until last week, however, Honig never heard of the new "under 26er rule."
A great need
Under the old rules, many young people who no longer qualified for their families' plans went uninsured as they searched for jobs, studied part time or, like Marshall and David, worked in jobs without health benefits.
Fully 30 percent of Americans aged 19 to 29 lack health insurance today, health experts said.
The new federal mandate is expected to significantly reduce that number as it rolls out in the next year. It will have added impact in California, which, unlike 37 other states, lacks its own law extending parents' benefits to young people.
An estimated 1.2 million young adults nationally will gain coverage under their parents' policies in 2011 alone, including 650,000 who were uninsured, federal officials say.
"It's extremely important. The rate of uninsured in this age group is really high," said Sara R. Collins, vice president for affordable health insurance at the Commonwealth Fund, a New York-based health policy foundation. The two main reasons young adults are bumped from their parents' policies, she said, are that they don't go on to college or they graduate from college.
Young people often struggle to find insurance on their own, according to a Commonwealth Fund survey of 19- to 29-year-olds who went to college and had insurance for most of their college years. The survey found that 28 percent lost coverage when they graduated, and 39 percent switched to another source of coverage. In those two groups, 40 percent went without insurance for at least a year, and 27 percent went without it for two years or more.
The sagging economy has made matters worse, as new high school and college graduates struggle to find permanent jobs or even internships with pay.
For young adults fortunate enough to find jobs with benefits, many have found themselves first in line for layoffs, said Shana Alex Lavarreda, director of health insurance studies at the UCLA Center for Health Policy Research, who estimates that more than 1 million Californians in the 18-to-25 age group are uninsured.
Not without cost
This new benefit doesn't come without cost.
Federal officials estimate that the average cost for covering a young adult on an employer policy will be $3,380 in 2011. How much of the higher costs will fall to employees will vary from policy to policy, but some with family coverage may not see any premium increase at all.
The expanded benefit should not be seen as a panacea for all young adults who lack insurance, experts warned.
It hinges entirely on their parents' access to health insurance, either through an employer or a plan they purchase on their own. That plan can't be an individual policy but one that provides coverage to dependents.
Parents who do qualify may have a hard time deciphering when and how they can add or keep their children on their plans, since insurance companies and employers have set a dizzying array of timelines as they phase in the new guidelines.
Young adults whose parents are unemployed and lack insurance are out of luck. So are those whose families are on Medi-Cal, which cuts off benefits to children when they turn 19, leaving most of them ineligible for public assistance.
In addition, some young adults may have to wait most of a year before their parents' policies offer the new benefit. Still, the wait will be worth it for those so hard-pressed to pay for gas, rent and student loans that health insurance is a luxury.
"The good news is that it should be fully in force for next year's graduating class," said Anthony Wright, executive director of Health Access California, a statewide consumer care advocacy coalition. "That's a big plus."
Full-time or nothing
Many local young people lose their parents' insurance coverage long before college graduation.
They include students at Pasadena City College, Mt. San Antonio, Citrus and Rio Hondo colleges who can only attend part time, often because they have a job and don't have time for the 12 units of classes required in community colleges for full-time status.
Rangel spoke matter-of-factly about being removed from her parents' Blue Cross plan after she graduated from El Monte High School.
"I actually didn't find out that they dropped me until I went to the doctor for a checkup three months after graduation," she said. "I wasn't expecting to have to pay the bill myself."
After moving away and then back to El Monte a year ago, Rangel enrolled part time in a medical assistant program at the El Monte campus of the United Education Institute, recently graduating with a certificate. Now, she's looking for a job and wants to re-enroll at PCC and major in mathematics. She's considering becoming a teacher, or an architect.
Yet, getting the classes she wants will likely take some time. The fall semester classes she needs in English and mathematics have already filled up, she said, and she will most likely "walk in and hope a student doesn't show up."
"It's stressful," she said. "So stressful, I worry that it'll affect my health. Then not having insurance will really be a problem."
PCC counselor Bianca Richards is all too familiar with such predicaments.
"Oftentimes, what happens, the students come in in a panic after they've registered, and they don't have 12 units. They say, "My parents say I have to get 12 units or I won't have insurance,"' Richards said.
"This is something I've always thought desperately needed to be changed, for those young people who can't get 12 units or choose not to have 12 units because they want to work."
Already working for some
For some young adults who faced losing their insurance, the new mandate is already working. Some insurance companies gearing up for the new rule started benefits early this spring by allowing young adults who might otherwise have fallen off their parents' plans to stay insured.
"We recognized that waiting until the Sept. 23 start date to take effect could result in a lot of individuals losing their coverage," said Erica Perng, corporate communications manager for Blue Shield of California.
The 14,000 employees at Rosemead-based Southern California Edison have received periodic updates about the insurance changes since health care reform passed, Edison spokesman Gil Alexander said. Employees will have the chance to add dependents to their coverage during their annual enrollment period in October, effective Jan. 1.
The company estimates several thousand dependents will be added, Alexander said.
Insurers are confident of a successful rollout.
"I think this will be a smooth transition by plans and by families," said Patrick Johnston, director and CEO of the California Association of Health Plans, which represents health insurers. "There's a lot of interest by parents in doing this."
Honig also is ready. After hearing about the new rule, she contacted her parents, who checked with their insurance companies. Her father's plan will take her back as of Jan. 1.
Her first trip, she said, will be to the dentist's office, to get some long-delayed X-rays.
Healthy choice again
An estimated 1.2 million young people up to age 26 will gain coverage next year through their parents' insurance plans.
WHO QUALIFIES: Young adults qualify even if they do not live with their parents, hold part-time or full-time jobs or are married, although their own spouses and children would not be covered. They can leave and rejoin their parents' plans as many times as they wish.
WHO DOESN'T QUALIFY: Young adults cannot stay on their parents' plans if they get a job with health benefits. They are not eligible if their parents are uninsured.
TIMING: Most plans won't offer coverage till Jan. 1, and some will wait until next summer. Some insurers have voluntarily provided early coverage for young adults due to graduate or "age off" their parents' plans.
QUALIFIED POLICIES: The new policy applies only to health insurance plans that offer dependent coverage in the first place.
COSTS: Family premiums are projected to rise about 1 percent, according to the government, but individual policies will vary widely.
FOR MORE INFORMATION: Contact your insurer or employer, or read about young adult coverage at www.healthcare.gov.
Sources: U.S. Department of Health and Human Services, Commonwealth Fund, Consumer Reports
Staff Writer Rebecca Kimitch contributed to this project, which represents a partnership between the San Gabriel Valley Newspaper Group and the California HealthCare Foundation Center for Health Reporting. The Center is an independent news organization devoted to reporting about health care issues that concern Californians. It is headquartered at the University of Southern California's Annenberg School for Communication & Journalism and funded by the non-profit, nonpartisan California HealthCare Foundation. Deborah Schoch is a senior writer at the center; Diya Chacko is a reporting assistant.