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23 and uninsured

Young adults about to be booted from their parents' health plans needn't go without

May 18, 2008|James S. Granelli | Times Staff Writer

Elaine Farrell deals with insurance forms and rules every day at the dental office where she works. But she recently found out that she's as much a novice as anyone else when it comes to general health insurance.
Her oldest daughter, Kristen, turned 23 last week and was booted off her parents' medical plan. The insurance company had mailed a notice about the impending change in status only a month earlier, sending Mom into panic mode.
"I never had to do anything like this before," Farrell said. "There were so many things to think about."
Farrell's daughter, a full-time Cal State Long Beach student who had a severe case of asthma as a child, uses inhalers and takes medication.
That would be enough for many companies to deny coverage altogether, especially in California, where state law won't allow insurers to issue policies that exclude most preexisting conditions. The Long Beach residents got their share of rejection letters until they finally found a bare-bones policy -- no dental, no vision, high co-payments, three doctor visits annually -- for $126 a month.

Who insurers want is someone like Antonio Bardales of Long Beach, a healthy, prescription-free 24-year-old college graduate. Last June, before he fell off his parents' plan, his father, Oscar, found comprehensive short-term medical insurance -- dental, vision, low co-pays -- for him at $92 a month.

"In the past year, he maybe went in once to see a doctor, and that was just for a checkup," the elder Bardales said, and that made his task easier than Farrell's.

Dilemmas abound for parents of so-called young invincibles, Americans aged 19 to 29, and for the invincibles themselves. About 40% of them go without health insurance, some because they don't care or think they don't need it, others because they can't afford it or can't get it.

Regardless of the reason, they tempt fate.

David Choi, 21, of Arcadia was snowboarding in Big Bear while on winter break from Northwestern University a few months ago when a fellow snowboarder plowed into him. Choi didn't have insurance at the time and paid the full cost of emergency room treatment and 10 stitches -- $1,500.

"After the accident, I figured it was worth it to get some kind of coverage," he said.

An untapped market

For the last few years, underwriters have been targeting young invincibles with more health plans. Some plans have been criticized for benefit caps of $10,000 or less and for not including prescription, dental or vision coverage. But with the general insurance market becoming saturated, young adults may be seeing more and better plans coming.

"It's the last untapped, financially viable market," said analyst William Georges at JPMorgan Chase & Co.

Still, insurers don't necessarily make coverage easy to obtain. Here are a few things to consider:

* An individual plan is tougher to get than an employer's group plan because carriers underwrite each policy and exclude people who pose too much of a risk. But the individual plan is cheaper because group plans have to accept everyone, increasing the risks for insurers.

* Many college alumni associations also offer health insurance, usually through two insurance brokers, American Insurance Administrators Inc. and Marsh Affinity Group Services. Marsh offers graduates of about 30 universities in California only a key group feature on their individual plans -- guaranteed acceptance if they apply within 90 days of graduation.

* It's not just your gender, age or health, but your ZIP Code that can save you money -- or cost you. One of Blue Shield of California's Essential Plans charges $103 a month for a resident of Inyo or Kern counties and $123 for a resident of Los Angeles. The reason? Competition and the cost of services vary from region to region.

* It's difficult to compare plans because there are so many variables. Deductibles and co-pays differ, reflecting various levels of premiums, and the percentage paid for in-network and out-of-network doctors and hospitals vary. Such websites as CalHealth.net, eHealthInsurance.com and WebMD.com can help make sense of the offerings.

* For those with incomes below about $51,000, Medi-Cal, Kaiser Permanente and other groups offer plans at reduced premiums. The Foundation for Health Coverage Education in San Francisco focuses on such coverage on its website, CoverageForAll.org.

One more thing -- you have to decide between a managed plan or a fee-for-service plan.

Health maintenance organizations such as Kaiser require you to use their facilities and doctors, while preferred provider organizations let you choose your own doctor from a list of private physicians who have agreed to accept certain payment levels; these plans will pay a lesser percentage for doctors outside their networks.

The lines are often blurred with HMOs sometimes dressed like PPOs. Aetna Inc. has offered HMO plans that have PPO characteristics, and Kaiser is looking to do something similar.

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