Health Insurance For Young Adults

Despite relatively low unemployment rates the last five years, the number of young adults without health insurance has skyrocketed. More than 15 million people between the ages of 18 and 34 are now living without medical coverage.

On The Early Show Thursday, financial guru Ray Martin offered advice on finding affordable health insurance for people in that age group.

Martin says there are two factors behind the growing number of young adults who don't have health insurance.

First, changes in the workplace mean fewer jobs now have full benefits: Only 60 percent of employers offered health insurance to new employees in 2005. Young adults entering the workforce are finding that many jobs out there are now consulting, freelance and contract positions that don't provide benefits.

Second, the cost burden for insurance is shifting from the employer to the employee. New workers who are young, healthy and don't yet have families of their own are deciding they don't want to pay a couple of thousand dollars each year for benefits they feel they don't need.

But Martin emphasizes, "I strongly advise that no one go without health insurance, even for a few months. Why? Because you're exposing yourself to a major financial expense that can take years to recover from or ruin your credit history. In fact, lack of medical insurance is the No. 1 reason cited by people who file for personal bankruptcy."

Martin says some young adults who were covered under their parents' plans get kicked off when they graduate college. They typically have what the health insurance industry calls a "change of insurable status." Even if a young adult is covered as a dependant under his or her parents' employer-provided health insurance, many group health plans only cover dependant children up to age 19, or up to age 23 or 25 as long as they are full-time students. With many plans, as soon as the student graduates high school or college, he or she is no longer a covered dependant and no longer has health insurance.

But, because so many young adults are going without health insurance, more and more states have enacted laws designed to give them more breathing room, allowing children to remain covered as dependants on their parents' health plans well into their 20s. In New Jersey, which enacted the highest age limit this year, children can actually remain covered under their parents' health insurance until they turn 30.

Also, Martin points out, there are some ways to keep health insurance after you lose coverage.