Insuring Gen Y: Limited plans only a start

With 20-something adults a large and fast-growing portion of the uninsured, health plans are tailoring products for them. But the effort doesn't always pass muster with physicians also trying to find ways to cover the uninsured.

By Jonathan G. Bethely, AMNews staff. July 17, 2006.

To health plans, the largest, fastest-growing segment of the uninsured is not so much a problem as a marketing opportunity.

That segment is people ages 19 to 29, 13.7 million of whom were uninsured in 2004 (out of about 46 million uninsured Americans total), according to the Commonwealth Fund. That was a 20% increase over 2000.

Often the young and uninsured lose coverage when high school or college graduation leaves them ineligible for their parents' policies, or when they age out of state Children's Health Insurance Programs. Nearly 40% of college graduates and about half of high school graduates who don't go on to college will be uninsured for a period during the first year after graduation, according to the fund, which studies health issues.

But there is a growing belief among health plans and physicians that the high uninsured rate among 20-somethings is not all an accident of age, but that significant numbers of young adults decide not to buy insurance because they believe it's too expensive for the little care they seek.

Insurers and physicians each have made clear that they have a stake in getting the young and healthy onto the insurance rolls. Health plan company stocks are no longer the darlings of Wall Street, with investors believing that the industry right now isn't going to be able to push profit margins much higher. Meanwhile, according to Families USA, the average increase in premiums is $922 for families and $341 for individuals because of the number of uninsured Americans. Physicians provide, on average, $2,000 worth of uncompensated care every week.