Several options are available to provide health insurance for young adults. One is a federal law called COBRA. Adult children who lose eligibility under a parent’s policy can purchase continued coverage for up to 36 months if they (or a parent) pay the full premium plus a 2% administrative fee.
Another option, albeit costly, is to purchase health insurance sold to individuals. Short-term individual policies generally last six months to a year and may be renewed if policyholders remain healthy. Choosing a policy that covers only major medical costs may not pay for preventive care, but the policy will be less costly, and it will cover the major expenses associated with illness or injury. In a handful of northeast states, insurers doing business in the state are required to sell coverage to any resident regardless of health status. This is referred to as “guaranteed issue” insurance.
Young adults often lose coverage through their parents’ policies or public insurance programs (e.g., Medicaid and the State Children’s Health Insurance Program) at age 19 or during their early 20s if they are attending college full-time. In recent years, young adults have been the fastest growing group of the uninsured. An estimated 13.7 million young adults age 19 to 29 lacked coverage in 2004, an increase of 2.5 million since 2000. Not surprisingly, a number of states have passed laws raising dependent age limits on family policies to the mid-20s or, for residents of New Jersey, age 30.
Nationally, nearly two out of five college graduates and one-half of high school graduates who do not go on to college will be uninsured during the first year after graduation. As a result, they are far less likely than those with coverage to have a regular doctor.
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