One in Four Millennials Lacks Health Insurance

NEW YORK (MainStreet) — Approximately one in four Americans between the ages of 18 and 29 lacks health insurance, according to a new insuranceQuotes.com report.

Despite the Affordable Care Act's mandate that all Americans have health insurance, the report found 16% of all adults do not have health insurance; however, Millennials are 10 percentage points more likely to lack health insurance than people 30 and older.

"A lot has been made of the so-called 'young invincibles' who are choosing to forego health insurance," said Laura Adams, senior analyst at insuranceQuotes.com. "This could be a costly mistake, especially because this group has easy access to health insurance. Young people typically pay much lower prices to obtain coverage via the health insurance exchanges and can receive subsidies depending on their income."

Many Millennials believe they can simply go to a clinic or a "doc in the box" if they become ill, but treatment at those facilities are still expensive without insurance, she said.

"They are not really thinking about bigger catastrophes when they would need to go to the ER or hospital and how financially devastating that can be," Adams said. "It can cause them to go bankrupt and have debt that can stick with them a long time."

Millennials can also remain on their parents' health insurance policies until age 26, but too many are still uninsured, she said.

"We were pretty shocked at how many people are still uninsured and did not think it would be that pervasive," Adams said. "Millennials should be the most educated of all the groups. They have more options than other people, but they are not taking advantage of it."

Millennials can now purchase health insurance without having the fear of being denied for health issues, said Carrie McLean, director of customer care at eHealth.com, an online health insurance exchange based in Mountain View, Calif.

"What they may not know is that they need to buy during the annual open enrollment period or when they experience a qualifying life event such as moving to a new city," she said.

Paying out of pocket for a routine doctor's visit, plus lab work can add up quickly and wind up being very costly. Even an ambulance ride can costs thousands of dollars, Adams said.

"If you don't have insurance, you are leaving yourself open to many potentially devastating circumstances," she said.

Unpaid medical bills will wind up in collection, which will appear on your credit report and affect your credit score, Adams said.

"It is very damaging and it those charges will be on your credit report for seven years before it drops off," she said. "It ripples through all other areas of your financial life and consumers wind up paying high rates for health insurance, credit cards and auto loans."

Going without coverage also opens you up to tax penalties under the health reform law, McLean said. In 2015, the fine is 2% of your household income or $325 per adult, whichever is greater.

Health insurance premiums for Millennials are cheaper than those for other age groups. The average monthly premium for individual coverage for someone 18 to 24 years old is $146 while the premium for someone 25 to 34 years old is $208, according to cost data published by eHealth. The average monthly premium across all age groups is $271.

Being aware that young people sometimes don't need coverage quite as robust as older people, Obamacare created a special category of plan called catastrophic plans just for people in this demographic, she said.

"Catastrophic plans are generally less expensive than bronze, silver, gold or platinum plans and they are available only to people under age thirty," Adams said. "Catastrophic plans still provide you with valuable coverage and will protect you from a federal tax penalty."

About 85% of individuals buying private insurance receive financial assistance with an average subsidy of $2,752 annually, said Michael Mahoney, senior vice president of consumer marketing for GoHealth, a Chicago-based online exchange for health insurance.

"If you are shopping for coverage during a designated enrollment period, it's worth exploring your options and calculating your tax credit to see if you're eligible to save money on an individual health plan," he said.

insuranceQuotes.com observed that 18- to 19-year-olds are less likely than all other age groups to have other types of insurance, including health, auto, life, homeowner's, renter's and disability insurance. While some of this can be attributed to living with their parents or having fewer assets to protect, there is ample evidence that Millennials are unprepared for potential financial risks.

Only 12% of Millennials have renter's insurance. This coverage can be very inexpensive or about $10 per month in many cases. It provides liability coverage and replaces personal belongings if they are damaged or stolen.

Life insurance remains unpopular with 64% who lack it. The most common explanation was that it costs too much, but $500,000 of 20-year level term life insurance can cost less than $20 per month for a young adult. Many Millennials have a "taggering amount of student loans that was co-signed with a parent. Student loans are not forgiven in the case of a death and life insurance can be "a solution to that problem, Adams said.

Despite the evidence that Millennials do not have a lot of insurance, most of them or 60% are confident they are prepared for the financial consequences of car accidents, having their belongings stolen, incurring substantial medical bills or becoming disabled.

-Written by Ellen Chang for MainStreet

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