New Graduates Fly Without a Safety Net

by Anita Grier and Anthony Wright

Congratulations, grads. Revel in these last few days while you are still cocooned and cared for in your families and school communities. After graduation, your search for the basics to support your life will be more precarious and risky.

That's because graduation also means almost 400,000 of these young adults (younger than 24) will be cut off from health insurance under their parents' plans or from their universities. A report by the Commonwealth Fund (www.commonwealthfund.org) showed that 2 out of 5 college graduates are uninsured after they leave school.

In California, 20-to-29-year-olds make up the largest percentage of uninsured, at 29 percent. Now some critics say that it is their fault. They think young people are slackers, or don't care about their health, or are spending a fortune on the pleasures of the here and now.

They are wrong. Young people tend to pick up coverage at the same rates as other age groups.

For many new grads who are out looking for work, it's an even harder job to find affordable health coverage.

According to the most recent California Health Interview Survey (www.chis.ucla.edu), young adults are four to five times less likely to be eligible for health care on the job, compared with adults in all other age groups. Why? Young people starting their careers now face a changed job market, with an increased reliance on temporary workers, subcontractors, part-time workers and extended probation and waiting periods. What's more, 20-to-29-year-olds are more than twice as likely to be in jobs that don't offer coverage at all.

So what's a young person to do? If you've shopped for insurance as an individual lately, you already know the answer. Insurance companies don't have to sell you coverage, when you're buying on your own. If you've got a "pre-existing" condition, you're out of luck -- and your "condition" could be something as common as ear infections -- when you were a toddler. Of course, if you can find a company that will sell you insurance as an individual, be prepared to take out a health insurance loan (to go with your student loans now coming due). Health insurance for individuals is expensive (when you can find it).

Let's take a typical, healthy 23-year-old with a liberal arts degree (the top degree in the state), with an entry-level position that would earn about $35,000 in San Francisco. The young adult would have 101 plans to choose from: a "typical" low-end plan starting at around $50 a month.

What does $50-a-month buy you? No coverage for primary care visits, no prescription drug coverage (which means no birth control or antidepressants) and no maternity. Women are allowed OB/GYN examinations but must pick up at least 25 percent of the cost of the office visit. So what are you paying for? Coverage that doesn't kick in until you've spent at least $1,500 for a deductible. Deductibles for these "less expensive" plans can be $5,000.

Blue Cross has an entire line of products dedicated to twentysomethings, called "Tonik" with high-deductibles and no coverage for what a young person is most likely to need -- maternity.

By contrast, the average single California worker who receives coverage on the job pays the same amount, but receives more comprehensive benefits -- such as a fixed co-pay for doctor's visits, and prescription drug coverage. Young adults who want traditional, comprehensive plans that many of us get on the job, they would have to pay no less than $90 a month and up to $410 a month. For new graduates beginning their careers with entry-level salaries and loads of student loans, asking them to pay $46 a month for a policy they can't be used until they've spent at least $1,500 is unreasonable. They're practically paying to be uninsured. Blaming their lack of insurance on them because they can't afford a richer plan is unfair.

We should be focused on systemic changes to ensure that we all share the responsibility of making sure that Californians, young and old, get good, affordable health care. Gov. Arnold Schwarzenegger and leaders in the state Legislature have started that process. We need to make sure they follow through with real health-care reform this year.

A long-standing proposal that could help all Californians -- not just young adults -- is SB840 by state Sen. Sheila Kuehl, which would create a universal, single-payer, Medicare-like system in California. The proposals of Assembly Speaker Fabian Nuñez and Senate President Pro Tempore Don Perata make it more likely for young adults to achieve on-the-job coverage by setting a minimum employer contribution of 7.5 percent of payroll on both full-time and part-time workers' health care. Other reforms in the discussion that would help young adults include: reforming the insurance market for people who must buy coverage on their own; expanding public health programs; guaranteeing that coverage is affordable to buy and use; and setting a minimum standard for insurance packages -- rather than promoting and encouraging bare-bones plans.

Policymakers could also take a cue from other states, such as New Jersey and Utah, which require private insurance to cover dependent children up to a higher age -- 25 or 28 years old, as they pursue higher education.

As for this year, no "break a leg" wishes when your senior goes up to get her or his diploma. In the current state of health care, that could be one expensive wish.