Health insurers know the importance of signing up so-called “young invincibles” to their health plans, but many of these sought-after individuals are not interested—either because they can’t afford health insurance or they simply think they don’t need coverage.
Health insurance companies understand that having these low-cost prospective members paying into the system could decrease member health insurance costs across the board.
Young adults aged 19–29 are one of the largest segments of the U.S. population without health insurance, according to The Commonwealth Fund’s Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help.
A whopping 13.2 million, or 29%, of young adults lacked health insurance coverage in 2007. Many of them lost coverage at or after age 19 when they graduated from high school or college. In fact, turning 19 increased the uninsured rate nearly threefold, according to the report. Young adults might think they don’t need insurance, but The Commonwealth Fund thinks otherwise. Not having insurance creates barriers to care and leaves young adults and their families exposed to hefty out-of-pocket costs, according to the report.
There are also health reasons for why young adults need insurance. Fifteen percent of young adults have at least one chronic health condition, such as asthma, cancer, or diabetes; young adult mothers gave birth to 2.6 million children in 2007; and injury-related visits to the ER are more common among young adults than any other group (1,453 per 10,000), according to The Commonwealth Fund.
How can health insurers and policymakers change this trend? Here are two ways health insurers can do it:
Promote individual health insurance to young adults and their parents. Health insurers need to do a better job at promoting their offerings. This goes beyond creating a cute, fuzzy mascot to preach the importance of Acme Health Insurance. That may make young adults aware of you, but that still doesn’t mean they know that they are eligible to sign up for those plans. They may view health insurance as something for their parents.
One way to promote your services to young adults and parents is knowing state-dependent laws and reaching out to parents and children about individual health insurance options when children reach their late teens.
After you have informed them, it’s time to take the next step. When the child exceeds the dependent age and loses coverage, the insurer should create a mechanism (e.g., a phone call, e-mail, or traditional mail) to reach out to parents and young adults about their health insurance options. Many don’t realize there is an individual insurance option available to them, so it’s up to insurers to tell them.
Not only would you benefit from gaining young adults as members, but your company could also acquire a lifelong member.
Make individual health insurance more desirable. Once young adults have signed up for insurance, it’s important to give them what they want and in the form of communication they want.
This means investing in technology and allowing young adult members to work with their health insurer on their own schedule via the Web; venturing into the social media world of Facebook and Twitter; and creating applications that allow individualized communication.
Every industry is moving toward individualism. Young adults will expect it from their health insurers, too. That’s the best way to reach them.
The following are two pieces of state legislation that could improve health coverage access to young adults:
Increase the age that young adults can be considered dependents for insurance purposes. New Jersey and New Hampshire allow residents to include their children under their health insurance up to age 30. Another 24 states have similar laws with less liberal age requirements. Most of them allow parents to cover their children until age 25.
States have created these laws because many young adults lose their parents’ coverage once they graduate from college. The transition from school to the workforce often includes low wages and no health benefits and leaves many young adults without health insurance. Providing a safety net by increasing the dependent health insurance age could resolve that issue.
Allow mandate-lite health plans. Some states have options that allow insurers to offer health plans with few state mandates, which reduces the costs of offering those plans.
There are about 2,000 mandated healthcare benefits and providers throughout the country, and those mandates increase healthcare costs by more than 50% in some states, according to the Council for Affordable Health Insurance.
Some of these mandates include services such as hair and limb prostheses, bone mass measurement, and care for TMJ disorders; providers such as dentists, optometrists, and marriage therapists; and covered persons such as noncustodial children and adopted children.
The benefit of mandate-lite plans is that they are low-cost options for young adults who simply want preventive and catastrophic coverage. The downside is that they might not cover certain services, such as maternity care. Educating young adults about these plans is critical if your state provides mandate-lite options.
These are a mere four ways health insurers and policymakers can tackle the issue—short of implementing a federal individual mandate that would require all Americans to have health insurance. All four ideas could be implemented without much difficulty or capital.
In a time when the healthcare industry is facing fewer employer-based members and a potential public insurance option, think about how the infusion of millions of uninsured young adults would benefit health insurers. These proposals could add new members who are lower cost than the general member population—especially elderly and sick members.