Insuring the Invincibles

Golden Rule has been battling that mindset with short-term policies that typically last six months or less and can be cancelled at any time. The plan has minimal medical underwriting restrictions. Basically, the plan asks if the customer smokes cigarettes, has had a transplant, or had one of a small handful of diseases. Rates, which vary by county, range from $52 to $160 a month for the average 24-year-old Floridian.

New Law Extends Coverage

While insurance companies continue to market to this young demographic, with varying degrees of success, the Florida Legislature has come up with its own solution. Lawmakers passed a bill in May that allows children (we use this term liberally) to stay under their parents' health coverage until their 30th birthday, even if they no longer are in school or living at home. The coverage can be extended onto any group policy as long as the child resides in Florida and doesn't have any children of his own. Until now, children could only continue coverage until age 25; they also had to be living at home or going to school. While the health insurance lobby did not try to block the law from being enacted, it is still weighing how to implement the provision.

Don Lohr, a health insurance agent with Herbie Wiles Insurance in St. Augustine, said that the law, which takes effect in October, "will be good for consumers because it will provide one more piece of the puzzle to deal with the uninsured." However, Lohr cautioned that, "I can't imagine this will have much of an economic impact to the cost of health insurance."

Karen Hovis, a Stuart health insurance agent, said she has mixed thoughts on the extended coverage for adult children. On the one hand, she thinks adults after 25 should be able to "take responsibility for themselves" in getting a job and health insurance. At the same time, she knows many employers don't automatically provide health coverage for employees in positions typically held by people just out of school. She said the law will be most helpful to twentysomethings who have health conditions that make health insurance too expensive or unavailable. "It's the people with chronic health conditions who may be most helped by this," Hovis said.

Laden predicted that the expanded dependent coverage will help resolve an issue that, for years, has defied an easy solution. "It certainly has the potential to make sure more young Floridians are covered," she said. "It's a positive step."

The extended dependent care coverage was included as part of Governor Charlie Crist's Cover Florida program. Beginning in January it will offer a "no-frills" type health plan to the 3.8 million uninsured Floridians for no more than $150 a month. Unlike other types of individual coverage, insurers will not be allowed to medically underwrite the policies.

The Agency for Health Care Administration in July opened the program to bidders, hoping to have at least one statewide plan and several regional ones. Of the major insurers, only Humana has said it won't participate.

While Crist has made much of his Cover Florida plan, he's yet to predict just how many Floridians will sign up. Because there's no mandate for individuals to buy coverage or for employers to offer a plan, critics have low expectations. Also, Cover Florida was given virtually no money to promote the new plans. Instead, it's counting on state officials to market the program alongside commercial health insurers.

Insurance Not a Priority

Lohr said the larger difficulty in getting people in their 20s to buy health insurance is to convince them they need it. "They don't realize the impact of one illness or accident can be potentially devastating to their fiscal health," he said.

"Young adults can easily get a policy for under $100," Lohr said, noting many of the plans have deductibles of $2,000. "Most people can afford it if they're out buying that big screen television and new car. It's a matter of priorities."

Wayne Wallace, director of the Career Resource Center at the University of Florida, said the students he sees are typically more concerned with salary, location, and job satisfaction than whether they are offered health benefits. He said young people would often rather spend the money on other things. "It's just not something they think about at age 23," Wallace said. "They don't think about how important it is until something happens, and it's too late."

Marti Kula, past president of the Palm Coast Association of Health Underwriters, said she doesn't think many parents will want to keep their kids on their health policy until age 30 unless the child has a chronic illness. "I can see most parents saying 'this is my child's responsibility.'"

Yet Kula, an agent with Rogers Benefit Group in West Palm Beach, said she knows when given the choice, most young adults will avoid buying insurance. Two of her stepsons chose not to get insurance only to regret it later when accidents put them in the emergency room. While both recovered, they were left with large medical bills they couldn't pay. The result: Their credit was damaged, which hurt them when they later tried to buy a house. "Most kids say they're invincible and would rather party with friends than buy health insurance," Kula said.

Mom and Dad Not the Only Option

Florida is one of at least 18 states that has enacted laws requiring insurers to allow parents to extend coverage for older dependents, often whether they are in college or not. A few other states have similar laws, but with various restrictions. Although a family's premium might go up, coverage is now available in most of these states for dependents up to age 23 or 25. In New Jersey, like Florida, the upper limit is age 30. A list of the states can be found at www.ncsl.org/programs/health/dependentstatus.htm1.

Of course, staying under a parent's insurance only works if the parent has group health insurance. The percentage of employers offering health insurance has dropped. In 2006, only 61 percent of employers offered employees health insurance, a drop from 66 percent in 2000, according to the Kaiser Family Foundation.

For people in their 20s, other options include short-term policies offered by colleges or associations. Many college alumni associations, including the University of Florida, have such policies. The downside of short-term insurance is it does not typically cover routine preventive care like physical exams.

"Insurance agents don't spend much time trying to sell individual policies to young adults because of the low commissions and because their customers can buy directly online from either the carriers or Internet sites," Kula said.

So the story of why so many millions of young adults go uninsured comes full circle. Twentysomethings may not see the value; parents don't want the responsibility; and agents lack the economic incentive to sell the policies. Is it any wonder then that market-based solutions have yet to solve the uninsured mess?