1. Health Insurance Coverage of Young Adults John Holahan The Urban Institute February 4, 2008 THE URBAN INSTITUTE

2. 2 Health Insurance Coverage, by Age and Income Percent Age 19-26 Age 27-34 Age 35-44 Age 45-54 Age 55-64 All Incomes Source: Urban Institute, 2007. Based on data from the 2007 ASEC Supplement to the CPS. Note: Excludes persons aged 65 and older and those in the Armed Forces.

3. THE URBAN INSTITUTE 3 Health Insurance Coverage, by Age and Income Percent Less than 200% of FPL Source: Urban Institute, 2007. Based on data from the 2007 ASEC Supplement to the CPS. Note: Excludes persons aged 65 and older and those in the Armed Forces. Age 19-26 Age 27-34 Age 35-44 Age 45-54 Age 55-64

4. THE URBAN INSTITUTE 4 Health Insurance Coverage, by Age and Income Percent 200% of FPL and Above Source: Urban Institute, 2007. Based on data from the 2007 ASEC Supplement to the CPS. Note: Excludes persons aged 65 and older and those in the Armed Forces. Age 19-26 Age 27-34 Age 35-44 Age 45-54 Age 55-64

5. THE URBAN INSTITUTE 5 Uninsurance Rates By Age and Income Family Poverty LevelAges 19-26Ages 27-64 Uninsurance Rate Percent of Population Uninsurance Rate Percent of Population Uninsurance Rate <100%29.9%46.812.2%44.9% 100%-199%24.2%40.914.6%35.7% 200%-399%27.0%22.228.7%16.4% 400%+18.9%9.044.5%5.6%

6. THE URBAN INSTITUTE 6 Compared With Older Adults, Younger Adults Are More likely to be single without children Less likely to work full time and more likely to be non workers More likely to be Hispanic

7. THE URBAN INSTITUTE 7 Uninsurance Rate by Age and Health Status Health StatusAges 19-26Ages 27-64 Uninsurance Rate Percent of Population Uninsurance Rate Percent of Population Uninsurance Rate Excellent/ Very Good 75.4%28.5%61.9%15.1% Good20.1%41.5%25.6%22.5% Fair/Poor4.5%38.6%12.5%22.3%

8. THE URBAN INSTITUTE 8 Insurance Coverage of Young Adults by Age, 2005-2006 Percent All Incomes Age 17Age 18Age 19Age 20Age 21Age 22

9. THE URBAN INSTITUTE 9 Uninsurance Among Young Adults, By Student Status, Ages 19-24 (in millions) Students Non- Students Total Young Adults9.7m14.5m Uninsured Rate19.2%39.3% Number of Uninsured1.9m5.7m

10. THE URBAN INSTITUTE 10 Employer Sponsored Insurance: Offer and Take-Up Rates, By Age, 2005 Age Offer/ EligibilityTake-UpOwn ESIAny ESI 19-2460%75%45%54% 25-3476%81%62%72% 35-4480%83%67%80% 45-6483%86%72%85%

11. THE URBAN INSTITUTE 11 Change in ESI Offers and Take Up Rates, By Age, 2001-2005 (Percentage Point Changes) Age Change in Offer/ Eligibility Change in Take Up Change in Own ESI Change in Any ESI 19-24-5.0* -7.7*-7.3* 25-34-3.6*-3.4*-5.7*-6.6* 35-44-2.5*-0.2-2.2*-3.2* 45-64-2.4*-0.4-2.3*-2.0*

12. THE URBAN INSTITUTE 12 Young Adults' Reports of Access Problems in Past Year by Insurance Status, 2005 Source: The Commonwealth Fund Biennial Health Insurance Survey, 2005. Adapted from Collins, et al. 2007 and reprinted with permission from author. Note: Refers to percent of young adults, ages 19-29, who reported experiencing the given access problem due to cost.

13. THE URBAN INSTITUTE Policies to Reach Young Adults 1. Require employers to allow parents to have kids up to age 24-26 as dependents. 1.6 million young adult uninsured children in families with one or more parents with ESI Many states already do this, no evidence of major effects Parents will likely have to pay much of the cost of dependents Risk of adverse selection 13

14. THE URBAN INSTITUTE Policies to Reach Young Adults (cont.) 2. Allow Medicaid/SCHIP to cover low income adults Only 14% of uninsured young adults are currently eligible Coverage of all those below poverty would reach 4.6 million of the 10.3 million uninsured young adults, assuming 100% participation; will also have adverse selection; crowd-out effects will be low because only 21% have ESI whereas 47% are uninsured (2006) Coverage of those between 100%-200% FPL would reach another 3.2 million; crowd-out rates will be higher (39% have ESI and 41% are uninsured) 14

15. THE URBAN INSTITUTE Policies to Reach Young Adults (cont.) 3. Require coverage of college students Would cover 1.9 million uninsured young adults Most (75%) uninsured young adults are not students; non students have a much greater likelihood of being uninsured. (39.3% vs 19.2%) May be necessary with state or national health reform 15

16. THE URBAN INSTITUTE 16 Candidates Proposals and Young Adults Tax Policies – Tax credit would cover a high share of costs of young adult policy, particularly if healthy and in low cost state – Tax deductions (e.g. Bush) would be less helpful because most uninsured young adults are low income Medicaid Expansion, Income Related Subsidies – Would provide subsidies to high share of young adult uninsured – Many would not enroll, despite subsidies, in voluntary system; young and healthy are most likely to remain uninsured – Lack of waiting periods in Medicaid will exacerbate adverse selection

17. THE URBAN INSTITUTE 17 Candidates Proposals and Young Adults (cont.) Insurance Reforms – Guaranteed issue and modified community rating can increase costs of insurance, particularly in voluntary system; these reforms will adversely affect young adults; even modified community rating will increase costs more than experience rating. Individual Mandate – Would require young adults to be covered; they would pay more for coverage than pre-reform – Many who would be mandated would receive financial assistance – What should their responsibilities be for support of older Americans, in exchange for guarantee of coverage later in life or in case of unexpected events?