Young Adults and Health Insurance
Editor's note: We recently received the following heartbreaking letter. The article that follows was first published in May, 2006. Little has changed.
"I think someone should address the issue of young adults with diabetes that are going out on their own, leaving home, when they are no longer on their parents' insurance, can't get insurance themselves, can't get help through the state if they don't have a child. I should know. I am 22 years old with over $100,000 dollars in debt, all of which is medical. I have poorly controlled diabetes due to years of not being able to afford bottles of insulin that cost a $100 dollars apiece. I need at least three a month and I was on my own paying bills and I couldn't get help. I had to sacrifice and most of the time I gave up my medications. I was in and out of the hospital in DKA every three months. I feel like giving u. I have so much debt and a life time ahead of living with diabetes.. I'm married now with a child and I wonder what I have done to my husband who was pretty much debt free before and now can't get a loan for anything. How can I provide for my daughter when I can't take care of myself? I want to make sure people know how hard it is for an 18 year old out on their. I don't want anyone to end up like me over $100,000 in medical debt living in a basement, depressed, and out of luck."
For most young adults, May is a month of looking forward. The month of May heralds summer vacation, and for those graduating from high school or college, it offers a diploma with a stamp of independence.
But Nicole Daley, a 23-year-old type 1 in New York City, warily eyes this impending milestone. She’ll be graduating from the Fashion Institute of Technology this month, and eight months later she will lose dependent status under her parent’s employer-sponsored plan—a deadline that has set her scrambling for health insurance. The clock is ticking: If she fails to secure coverage before her current plan expires, future carriers will view her diabetes as a pre-existing condition, and she’ll be forced to foot the bill for her diabetes care for at least a year, maybe indefinitely.
Most jobs available to recent graduates like Daley are low wage or temporary—the type that usually offer limited or no health benefits. She is working part time for a small marketing company, but the company can’t take her on full time. As a result, she is considering leaving her job to find something full time or leaving New York City altogether, where the cost of living, combined with her medical expenses—more than $1,000 a month, she estimates—is too much to bear.
Welcome to the real world, or, more precisely, the reality facing young adults with diabetes in America today.
Welcome to Adulthood
Amid the flurry of life changes that accompanies young adulthood—changes in schools, housing, jobs and relationships—teens and twenty-somethings with diabetes face a real risk of losing the health insurance they need to cover their treatment. In a healthcare system without universal coverage, where access to health insurance is determined principally by employment and family status, the transitory nature of young adulthood makes individuals in that age group especially vulnerable. According to the Kaiser Family Foundation, approximately one-third of all uninsured Americans are between the ages of 19 and 24—a number twice that of 30- to 64-year-olds. In addition, according to Gallup’s annual survey on health and health care, conducted in November 2005, one in five 18- to 29-year-olds is uninsured.
The health insurance industry’s tough love begins at ages 18 and 19, birthdays seen by most private and public programs as the critical divide when teenagers are reclassified as “adults.” A 2004 study by the Commonwealth Fund found that nearly 60 percent of employers who offer health coverage do not insure children over age 18 or 19 if they do not attend college.
This fact gives high school graduates reason to worry. According to an analysis by Penn State researchers, of all young adults graduating from high school, three out of 10 were uninsured for some time in the first year following graduation.
For families with high school graduates immediately matriculating into college, the health insurance burden may be momentarily lifted, since many plans extend dependent status for teenagers until age 25 or as long as they are full-time students, but they still face weighty considerations. For starters, some policies have a minimum credit hour requirement in order to qualify as a “full-time” student. And other life changes can affect status. For instance, if a student should get married, most policies will terminate him or her from the parents’ coverage.
What’s more, the coverage that was once provided to teenagers living at home may not be the same once they leave for college. This holds true in particular for plans through many health management organizations (HMOs), which may only provide emergency coverage out of the local area. “Out of network” doctor visits or prescription medications—even those written by college health clinicians—are usually not covered even if, under the plan, school clinicians are allowed to provide routine and emergency care.
Nicole Daley, who is covered by Kaiser Permanente, a California HMO, as well as by her limited school plan, has found it more cost effective to fly across the country to see a network doctor for routine checkups and blood tests. Even adequate coverage has come with some frustrations. Two years ago Daley was hospitalized for a diabetes-related kidney infection. It took a whole year for the bill to get paid, as her school and parents’ insurance plans wrangled over who should cover the cost.
On Their Own
Once out of school, young adults join the millions of diabetics for whom health insurance is a matter of not just physical, but financial, survival. They won’t find much solace, however, in this shared reality: Most diabetes policy experts agree that, in America today, no government-sponsored health protection provides coverage that is at once available, affordable and adequate for diabetes care. Finding private coverage that meets those essential criteria is equally challenging. For young adults, their options depend highly on the state in which they live and on their age and income level.
Greg Venker, a 23-year-old law student with type 1 living in St. Louis, pays $450 month for COBRA—a federal law that allows young adults who lose coverage under their parents’ employer-sponsored plan (for employers with more than 20 employees) to purchase temporary extended healthcare coverage for up to 36 months. In all but 12 states, state continuation or “mini-COBRA” coverage exists for individuals with small (fewer than 20 employees) group plans. Although COBRA offers a temporary reprieve, most young adults find it cost prohibitive because the employer no longer contributes their share of the plan.
Facing mounting student loans, Venker may be forced to drop COBRA and pay out of pocket for his diabetes care. His application for a Blue Cross policy was recently rejected, and he knows that if he goes uninsured, his chances of picking up coverage again are slim. “Every other part of me is healthy—my heart, kidneys, liver,” he says, echoing a frustration felt by millions of otherwise healthy young adults. “I just happen to be diabetic.”
Other recent graduates left with nowhere to go may purchase coverage through state-run programs known as “high risk pools,” available in 32 states. Only around 175,000 Americans are enrolled in high-risk pools across the country. Although pre-existing condition exclusions exist, an ADA-Georgetown survey released in February 2005 found that among diabetics of all ages, affordability, adequacy and bureaucratic red tape, not eligibility, were the main reasons for such low participation.
For example, a 23-year-old female in Missouri, under that state’s high-risk pool, might have to pay a monthly premium of $563 (at a $200 deductible). Selecting the highest deductible—$5,000—would, of course, lower that premium, to around $252 per month—but for a recent graduate, $5000 is a lot to shell out.
In many states, young adults who are losing dependent coverage under their parents’ employer-based group plan can enroll in an individual plan under the same insurer, an option known as “conversion coverage.” State law, however, doesn’t require that the conversion policy look anything like the comprehensive benefits afforded under their parents’ group plan, and in most states, the insurer can set the price of the individual policy, making conversion coverage typically more expensive than COBRA, with fewer benefits.
Charged More Because of Diabetes
Without a job that offers comprehensive health benefits, young adults face the grim task of finding an insurance company that will sell them an individual plan, as Greg Venker found. Even if they do, they’ll likely be charged more because of their diabetes. State regulation of the market varies greatly, and only a handful of states—New Jersey, New York, Massachusetts, Vermont and Maine—require insurance companies to sell coverage with comprehensive benefits to all residents at the same price, regardless of health status (in Michigan and Pennsylvania, only Blue Cross is required to do so).
In their 2005 survey of people with diabetes and their health insurance, Georgetown University and the ADA found that when it comes to insurance in the individual market, there is huge tradeoff between affordability and eligibility. If you can even get insurance, it will probably come at a hefty price. And for group health plans, where eligibility isn’t an issue, affordability comes at the expense of adequacy. For example, an employer-sponsored policy may cover hospital care and diagnostic services but not physician office visits or prescription drugs. Another might cover physician office visits but not prescription drugs and vision care.
The ADA has successfully fought for laws in 47 states, including the District of Columbia, that mandate that insurers offer adequate diabetes services and supply coverage. (Alabama, Idaho, Ohio and North Dakota don’t require such coverage.) Even so, the laws apply only to individual health plans and small- to mid-sized employer plans, since health insurance coverage provided by large employers and the federal government is not subject to state insurance requirements.
This leaves young adults working for large employers or the federal government at the whim of their employer for their diabetes coverage. A study conducted in 2005 by the Government Accountability Office, which found the diabetes education and medical nutrition therapy offered in some of the country’s largest private and federal employer health plans to be inadequate, makes that an uncomfortable position.
Ask Questions About What Is Covered In the Plan
Boyer recommends that young adults who are choosing plans provided through their employer “take an inventory of their current medical needs and ask detailed questions about what is and is not covered in the plan, to determine whether it is right for [their] needs. Just because something is sold in a pharmacy,” he says, “doesn’t mean it’s covered under a pharmacy plan—like test strips, which are considered durable medical equipment. Ask, what are my co-pays and deductibles associated with insulin? With test strips? Eye exams? And chose a comprehensive health plan, even if it costs several dollars more a month.”
Some safety nets exist for young adults with low incomes who may find themselves caught without any insurance. Government programs like Medicaid tend to be available only to disabled or pregnant diabetics, teenage mothers or parents of diabetics under age 21. For others, free or low-cost community health centers may offer clinical care. And while they probably won’t cover medication needs, most hospitals will provide financial assistance to people who cannot afford visits to a doctor, and some offer “free” or “compassionate” care to individuals who cannot afford their physician visits.
Many pharmaceutical companies also offer financial assistance programs to help pay for oral medications and insulin, and some include pumps and pump supplies when they cannot be paid for out of pocket. The qualifications for these programs vary widely, however, depending on age and healthcare status. They are meant to meet transient, not long-term, coverage needs, and as such, may require reapplication every few months.
TogetherRX Access, sponsored by some of the largest pharmaceutical companies, provides some diabetes medications and blood glucose meters and strips to low-income diabetics at a 25 to 40 percent savings. To qualify, young adults must have no existing public or private prescription drug coverage and an income of less than $30,000.
Young adults losing their health insurance coverage after graduation this spring will likely undergo a period of being uninsured: two-thirds of them do. It’s an unfortunate rite of passage into adulthood, leading to feelings of frightening vulnerability that will likely characterize health insurance transition periods for the rest of their lives as diabetics.
“It can be very scary when you don’t have health insurance and are paying full freight, as the consequences of it not working well can be incredibly devastating,” says Karen Pollitz, project director at the Georgetown University Health Policy Institute and co-author of the Georgetown-ADA report on health insurance for people with diabetes. “To the extent that young adults [can find] health insurance that won’t turn them down, that’s a first step. Next they need to find adequate and affordable coverage. Parents might have thought they were ‘done,’ but if they can’t keep helping, their kids may get into trouble.”
Mom and Dad’s Work Plans
About half of all fulltime students between the ages of 19 and 23 receive health insurance through their parents’ employer-sponsored plans, while another quarter have other sources of coverage, such as plans offered by their colleges or universities.
Students who want to continue the protections they have under their parents’ plans should not enroll in any other type of health insurance plan upon entering school, or they run the risk of preempting that coverage, warns Tom Boyer, a healthcare policy consultant and advocate who has drafted legislation supporting diabetes care.
“If you’re using [a school plan] as secondary coverage, you should be OK,” says Boyer. “But once a student moves off his or her parents’ plan, there’s no going back.” For the legal protections and tax benefits it affords, Boyer advises young adults to continue classifying themselves as dependents—“staying under their parents’ wing, as easy or difficult as that may be”—as long as they can.
Also, many university plans do not include comprehensive diabetes care, says Holly Whelan, public policy manager at the American Diabetes Association. She advises students enrolling in school to know how they’ll get their prescriptions and supplies, as some school plans include supplies, but with a limit, often up to only a couple of thousand dollars,—which is quickly spent by most diabetics, —after which students would be stuck paying out of pocket for the rest of the year. Also, the majority of school health clinicians are not specialized in providing diabetes care, and referrals to an outside doctor can be very costly.
Coverage Through COBRA
If young adults opt for COBRA coverage, the U.S. Department of Labor advises parents to notify their employer in writing within 60 days that their covered child is no longer a dependent. Their employer-sponsored healthcare plan should then advise the child of his or her right to extend healthcare benefits under COBRA (the Consolidated Omnibus Reconciliation Act). The child will then have 60 days from the date the notice was sent to elect COBRA coverage.
For young adults who exhaust COBRA, another federal protection, HIPAA (the Health Insurance Portability and Accountability Act), picks up where COBRA leaves off. If COBRA is not an option for a young adult, or if he or she lives in a state that doesn’t offer continuation coverage, the child may go directly from losing the parent’s plan to HIPAA, which guarantees the right to buy non-group coverage without pre-existing condition exclusions.
However, there’s no limit on what insurers can charge or guidelines for what they must cover under HIPAA, often resulting in premiums even more costly than those offered under COBRA.
Health Insurance Resources Online
The Georgetown University Health Policy Institute has a regularly updated consumer guide for getting and keeping health insurance for each state:
The American Diabetes Association offers health insurance information for people with diabetes:Click Here To View Or Post Comments