Young And Uninsured
Tamara Draut directs the Economic Opportunity Program at Demos, a non-partisan public policy research and advocacy organization based in New York. She is also the author of Strapped: Why America's 20- and 30-Somethings Can't Get Ahead. Cindy Zeldin is the federal affairs coordinator for the Economic Opportunity Program at Demos. She is based in Washington, D.C.
Propelled by a looming national health crisis and the stark fact that young adults are more likely than any other age group to be uninsured, New Jersey recently enacted legislation requiring health insurers in the state to extend dependent coverage for young adults up to age 30. Typically, family health insurance policies purchased through the workplace cover children until age 19 or, for full-time college students, until age 23. A handful of other states have extended the age limit to the mid-20s, but none have gone as far as New Jersey.
Most surveys find that about a third of young adults lack health insurance. According to recently published—but scarcely noticed—national survey findings from the federal Agency for Healthcare Research and Quality, however, more than half of young adults under age 30 were uninsured for at least one month between 2002 and 2003. Stable health insurance has become the exception, not the rule, for young adults.
There is a popular assumption that twenty-somethings don’t enroll in health insurance because they think they’re invincible against illness, but in reality most young workers lack health insurance coverage because their employers don’t offer it, or because they don’t qualify for the benefit. There are many factors that have led us here, but the basic truth is that today’s young Americans are starting out in an economy that is radically different from the one their parents entered a generation ago.
From the 1950s to the mid-1970s, stability was a defining characteristic of the U.S. economy and labor market. Major companies were in the business of large-scale production, and their workers tended to remain with the same employer throughout their careers, slowly climbing the ladder. Health insurance and pension benefits were standard.
In the new globalized, service-based economy, instability defines the labor market. Today’s young workers bounce from job to job in search of elusive salaries and benefits. Others juggle low-wage jobs with part-time studies for years in order to get the now all-important college credential. Still others find the best job they can get is temporary or contingent work, a virtually benefit-free zone.
Just as technology has transformed the overall economy, it has also transformed medicine, spurring life-saving and life-extending medical breakthroughs. While no one would argue that these breakthroughs are a bad thing, there is a downside: the steadily, sometimes dramatically rising cost of health care and, by extension, health insurance.
In the face of these high costs, many employers have scaled back or eliminated health benefits entirely. According to the Employee Benefit Research Institute, between the years of 2000 and 2004, the percentage of individuals covered by employment-based health insurance fell from 64 percent to 60 percent.
What does all of this have to do with extending dependent coverage to those under 30? Today’s young adults are the first generation to hit the new economy head-on, without either widespread workplace benefits or the presence of public policies that helped fuel the existing middle-class, such as low college tuition. Graduating from high school or college is no longer the instant trigger for financial independence that it once was.
Of course, older Americans in their 50s and 60s, the parents of this new generation, aren’t fully insulated from the broad economic challenges that young adults face, but they are still far more likely to have health insurance. Just over 20 percent of Americans in the 55 to 64 age group were uninsured for at least one month in that 2002 to 2003 period.
While maintaining health coverage for young adults through their parents’ policies won’t solve these underlying economic issues, it can give young adults a little more breathing room to find their way in today’s volatile economy. After all, even a brief spell without health insurance can lead to lasting financial stress if a medical emergency hits.
What this legislation—and the problem it addresses—underscores is just how much our economy has changed and how little our public policies have done to address the needs of working Americans, and young working Americans in particular. New Jersey is doing what it can by using its regulatory authority over insurance companies to contend with the problem. But as health insurance becomes more important, more costly, and increasingly rare as an employee benefit, young adults should demand that our national leaders tackle the important economic challenges that have conspired to create this generation without benefits.