Health & Science
Taking a Gamble on Health Insurance
Once they’re dropped from their parents’ plans, many twenty-somethings opt to “roll the dice” rather than pay the premiums.
tlj213@nyu.eduWhen Paul Vorderis graduated from college last May, he began a countdown: He had just six months to find a full-time job that offered him health insurance before he was dropped from his parents’ plan.
Vorderis, 23 of Salisbury, MA, started job-hunting immediately after getting his business degree from Stonehill College. But after dozens of interviews in both Boston and New York, he ended up taking a temporary position at a hedge fund, from which he receives an hourly wage and no benefits.
As far as health insurance?
“I’ll probably just roll the dice and see what happens,” says Vorderis, who’s covered by his parents’ policy for another month. “I’ll just have to be careful and hopefully by [the time my coverage expires] I’ll have something permanent.”
Twenty-somethings like Vorderis often face a grueling decision: Should they take a job, any job, simply because it offers health insurance? Should they spend money they don’t have buying insurance themselves? Or should they take a chance and live without any coverage?
To the dismay of public health professionals, many young adults say they are choosing the latter option. One in three people between the ages of 18 and 24 has no health coverage, according to recent U.S. Census Bureau report. With insurance costs skyrocketing, experts say these young adults often go without coverage because they are no longer eligible to stay on their parents’ policies and they have other, more pressing financial responsibilities themselves.
“I know I need health insurance, but I need to pay rent more,” says Nicole Ross, 21, who graduated from New York University earlier this year but has yet to find a full-time job. “No one is making me pay for health insurance, whereas [someone is] making me pay for rent, cable, and student loans. Insurance is the only thing I can put off for a little while.”
Andrew Hoffman, 24, who attends Coastal Carolina University, in Conway, SC, shares those sentiments. “When I think about health insurance, I think about a lot of money,” he says. “Right now I have $300 to my name. I ate Ramen noodles today. If you don’t have a job yet, how would you even pay for it?”
According to Susan Pisano, a spokesperson for the America’s Health Insurance Plans (AHIP), an industry group, another reason students hesitate to pay for health coverage is that many see themselves as “young immortals.” Those who have first-hand experience with expensive medical costs tend to better understand the importance of buying health coverage, she adds.
Keith Denis, a 21-year-old student at Suffolk County Community College, in Brentwood, NY, recently learned that lesson. After he graduated high school, Denis took a year off and held a number of part-time jobs. He was without health insurance for nearly six months before he returned to college full-time in 2004, thereby making him eligible to be covered by his parents’ policy. Looking back, Denis says he considers himself lucky to have had insurance when he was involved in a traffic accident that left him in critical condition earlier this year.
Because Denis had insurance, he says his family was able to worry about what was important—not about how they were going to pay the medical bills.
But Denis admits that, until then, he didn’t fully appreciate the importance of insurance. “I thought it was unnecessary and that I could just avoid it,” Denis says. “Now, I’ll give [the health insurance companies] whatever they want. I’d pay top dollar for it, and I’d recommend it to anybody.”
According to Pisano, coming to this realization is an important crossroads for young people. “It’s one of the first adult decisions that a child is going to make,” she says. “It involves accepting a responsibility for yourself that your parents have accepted up until now.”
Pisano advises young people not to let coverage lapse. “Look at what the rules for your school’s coverage, rules for your state and for how long you can stay on your parents’ policy,” she suggests. “Think about how to make the transition from one form of coverage to another in an environment where options exist with lower premiums.”
While many group health coverage plans now allow young people to convert their parents’ coverage into an individual policy, the option is expensive, according to Larry Lounds, president of the Association of Health Insurance Advisors (AHIA). Below are some alternative options that health professionals recommend for young adults.
Short-term individual health insurance: Also known as temporary health insurance, this type of plan usually provides health insurance for six to 12 months. However, it is often designed to protect against sudden accidents or unforeseen illnesses rather than a comprehensive plan that includes preventative care like physicals, vision and dental care. “Short-term coverage is [easy to get] and relatively inexpensive,” says Lounds. “It’s great gap coverage.”
High Deductible Health Plan: Also known as an HDHP, these plans generally don’t pay for the first several thousand dollars of health expenses but provide coverage after that, thereby insuring against catastrophic medical bills.
Health Savings Account: More commonly known as an HSA, this plan must be used in conjunction with an HDHP plan. It is a savings account that allows individuals to deposit money to pay for current health expenses and save for future qualified expenses on a tax-free basis.