Young Adults Can Face A Confusing Path To Health Insurance

July 5, 2016, 12:04 PM ET
Michelle Andrews - NPR

The Obama administration is making a push to get young adults covered on the health insurance marketplaces, both for their own good and that of the marketplaces. The insurance exchanges need healthy people to balance sicker ones in the risk pool.

Despite beefed-up outreach planned for the coming months, several factors may throw a wrench into enrollment plans for young people.

To start with, the transition from children's Medicaid to adult coverage can be bumpy. Nineteen is the age at which lower-income young adults are generally no longer eligible to be covered as children by the Medicaid or Children's Health Insurance Program. Options for them include moving to adult Medicaid in states that have expanded coverage to 138 percent of the federal poverty level (about $16,000), or buying a subsidized plan on the health insurance marketplace.

"I'm sure there are states that do transitions really well, but I can't point to one," said Shelby Gonzales, a senior health policy analyst who focuses on enrollment and eligibility issues for the Center on Budget and Policy Priorities. "In general, a lot of states are struggling, when [young adults are] being terminated from Medicaid, with getting them on a pathway that's smooth to the marketplace."

The transition to adult Medicaid can also be problematic. Thirty-one states and the District of Columbia have expanded coverage, and it's available for some of these young adults, she said.

Clunky computer systems and uninformative coverage notices may make it easier to drop coverage at age 19 than continue it. Sometimes, for example, a young adult will receive a notice explaining that she's no longer eligible for Medicaid under a particular section of the law, but not receive information about other coverage options.

Or some states don't have a routine process to check whether the 19-year-old is eligible for another category of Medicaid after aging out of child coverage. Or she may get sent to the marketplace for coverage, but wind up filling out all the application information from scratch even though her Medicaid file already has the information.

When young people try to apply for coverage on the marketplace, they may run into another snag: difficulty proving their identity, the first step in the enrollment process. With little or no credit history, they may have to verify their identity by phone or submit documentation that proves they are who they say they are. Such frustrations can lead young people to walk away from the process.

"Any of these are points where you might lose someone," Gonzales said.

Since the health law passed, the uninsurance rate among young people between ages 19 and 25 has fallen by more than 50 percent, according to the Centers For Medicare & Medicaid Services. But young adults are still more likely than other adults to be uninsured.

The Obama administration has acknowledged the difficulty in transitioning young people from Medicaid or their parents' policies to other coverage. It noted that at age 19, the uninsured rate jumped nearly 7 percentage points in 2014, according to the Census data, while 26-year-olds' rate of uninsurance increased 4 percentage points as they aged off their parents' plans.

New restrictions on special enrollment periods may also pose a particular problem for young people, experts say. If people experience certain life events they can qualify for a special enrollment period during the middle of the year to pick a new plan. Insurers complained that people were using a special enrollment period to sign up for coverage to receive medical treatment, then dropping coverage after they got the care they needed. So the Obama administration said that it will begin to require that people document that they really did experience some of the most common life events that have triggered the new enrollment, including marriage, the birth of a child, loss of another type of coverage and a permanent move.

Young people are disproportionately affected by these events. In addition to marriage and childbirth, young adults between the ages of 20 and 29 relocate at twice the rate of older adults, according to Young Invincibles, an advocacy organization for young people.

"I think the new documentation requirements regarding [special enrollment periods] could really backfire, and the result could be different than the administration intends," said Sabrina Corlette, research professor at the Georgetown University Center on Health Insurance Reforms.

One of the challenges of insuring young adults is convincing them that they need it. Many young adults are relatively healthy. When money is tight, health insurance may seem like a luxury they can forgo.

Young Invincibles is trying to get the word out that marketplace coverage can be extremely affordable with premium tax credits and cost-sharing subsidies, said Erin Hemlin, the group's national director of training and consumer education. Young Invincibles also highlights the preventive care benefits that are available in all marketplace plans at no charge to consumers.

Coverage of birth control pills alone may be enough to boost sign-ups. "For young women, they say birth control is the No. 1 selling point," Georgetown's Corlette said.

Kaiser Health News is an editorially independent news service that is part of the nonpartisan Henry J. Kaiser Family Foundation. Michelle Andrews is on Twitter:@mandrews110.