k aic osmemri s s i o n on

I
S
S
U
medicaid
E
and the
uninsured January 2010
P Uninsured Young Adults: Who They Are and How They Might Fare Under Health Reform
A By Karyn Schwartz and Tanya Schwartz
P
Executive Summary
E
R Young adults, age 19-29, have the highest uninsured rate of any age group in the United States. This
age group comprises 30% of the overall uninsured population, making them a key target of health
reform efforts. Legislation passed in the House of Representatives and in the Senate includes various
mechanisms for expanding health coverage to the uninsured. This brief highlights the current health
coverage status of young adults, current approaches to expand coverage to this population, and how
they might be affected by national health reform.
Young adults represent nearly one-third of the uninsured population. Half of these uninsured
young adults work full-time and 18% work part-time. However, many uninsured young adults work
for small employers that are less likely to offer health coverage to employees. Although the majority
of young adults are employed, many of them work in low-wage positions. More than half of
uninsured young adults have family incomes below 150% of the federal poverty level (FPL).
Additionally, only 6% of uninsured young adults have incomes at or above 400% FPL.
Although young adults are largely healthy, access to routine care and ongoing care for
chronic conditions is crucial to sustaining and improving their health status. Receiving
preventive services and health education during early adulthood can help reduce health problems
later on in life. Additionally, 14% of uninsured young adults have a chronic health condition,
which typically requires ongoing care. Despite the need for routine and ongoing care, over half
of uninsured young adults have no usual source of care and about one-quarter could not afford a
prescription drug they needed in the past year.
Although there has not been federal action to reduce the number of uninsured young
adults, some states and private insurers have made efforts to expand coverage to more
young adults. Twenty-five states have increased the age that children can be covered under
their parent’s private health plan in the group insurance market. Additionally, states and private
health plans have developed insurance plans targeted at young adults that typically have lower
premiums but contain less comprehensive benefits.
National health reform legislation includes various strategies to expand coverage to uninsured
young adults. Health reform bills being debated in Congress would require most individuals to
purchase health insurance. In order to meet this requirement, the legislation builds upon the current
health insurance system to create new avenues for young adults to obtain coverage. The strategies
include imposing new requirements on employers that do not offer coverage and allowing dependents
to remain on a parent’s health plan until age 26 or 27. Medicaid eligibility would also be expanded to
133% FPL or 150% FPL, which would enable over half of currently uninsured young adults to qualify
for Medicaid. Individuals and small employers would be able to purchase coverage through a health
insurance Exchange and premium subsidies would be provided for individuals with incomes up to
400% FPL to make coverage more affordable.
1330 G STREET NW, WASHINGTON, DC 20005
PHONE: 202-347-5270, FAX: 202-347-5274
W E B SI T E : W W W . K F F . O R G
 Uninsured Young Adults: Who They Are and How They Might Fare Under Health Reform

Young adults, age 19-29, have the highest uninsured rate of any age group in the United States.1
This group comprises 30% of the overall uninsured population, making them a key target of
health reform efforts to reduce the number of uninsured. Their high uninsured rate is due in part
to the fact that coverage received through a parent’s private plan or through a public program
typically terminates when an individual turns 19 years old. In addition, many young adults have
entry-level, low-wage, and temporary jobs which make it more difficult for them to obtain
coverage through their employer or afford coverage in the individual market. This brief
examines how young adults obtain health coverage today, current approaches that are being used
to expand coverage to them, and then goes on to discuss how national health reform may affect
this population.

I. Health Coverage of Young Adults

Young adults have the highest Figure 1

uninsured rate of any age group in the Health Insurance Coverage of the
Nonelderly by Age, 2008
country. Almost one-third (30%) of
young adults are uninsured, compared to Uninsured Medicaid/Other Public Private

17% of the entire non-elderly

population. The uninsured rate for
Children 10% 31% 58%
young adults is almost twice as high as
the uninsured rate for adults age 30-64 Young adults (19-29)
30% 13% 57%
(Figure 1). Young adults have lower
rates of private coverage than older Adults age 30-64 17% 12% 71%
adults, which leads to higher uninsured
rates since adults have limited access to Data may not total 100% due to rounding.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.
public coverage. Young adults also
have a much higher uninsured rate than
children, who are more likely to qualify for public coverage.
Among young adults, those with lower Figure 2

incomes are much more likely to be Young Adults’ Health Insurance

uninsured (Figure 2). Almost half of Coverage by Family Poverty Level, 2008
young adults with family incomes below
150% of the federal poverty level (FPL) Uninsured Medicaid/Other Public Private
Number
are uninsured ($16,802 for an individual 400% + 9% 3% 88% 9.6 M
and $21,734 for a family of two using
the 2008 Census poverty threshold).2
200-399% 22% 6% 72% 12.5 M
`

4.6 M
By contrast, only 9% of young adults 150-199% 37% 10% 53%

with incomes at or above 400% FPL are Under 150% 45% 23% 32% 18.6 M

uninsured.
The Census federal poverty threshold was $11,201 for an individual under age 65 and $17,163 for family of three in
2008. Family size and total family income are grouped by insurance eligibility. Young adults includes all individuals
aged 19-29.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

1
Details on uninsured rates for young adults and a profile of uninsured young adults are available in an appendix
table.
2
The term family is defined as a health insurance unit (those who are eligible as a group for “family” coverage).

2 00
More than half of uninsured young adults Figure 3

Uninsured Adults by Age and

have incomes below 150% FPL (Figure 3).
Employment/Student Status, 2008
These young adults are the least able to
400% FPL +,
afford to purchase their own coverage, and 6%
300-399% FPL,
those who are working are likely in low-skill 6%
jobs that may not offer health insurance. 200-299% FPL,
More than one-quarter of uninsured young 14%
<150% FPL,
adults have incomes from 150%-299% FPL. 61%

These individuals would likely also have 150-199% FPL,

12%
trouble paying the full cost of health
insurance. Just 6% of uninsured young
adults have incomes at or above 400% FPL Total = 13.7 million uninsured

($44,804 for an individual in 2008). Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

Half of uninsured young adults live in Figure 4

Median Family Income by Age and

families with incomes below $15,000 a
Health Insurance, 2008
year (Figure 4). Even when young adults
who have not worked in the past year are
excluded, the median family income of those $40,000
who are uninsured is $18,000. Only 13% of
uninsured young adults are in families with $22,880
incomes at or above $40,000 a year, $15,000
compared to about half of privately insured
young adults. Uninsured young adults have
lower family incomes than uninsured older Privately Insured Uninsured Young Uninsured Adults
Young Adults Adults Age 30-64
adults, which leaves younger adults less able
to pay for health insurance premiums or for Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

medical care if they remain uninsured.

About half of uninsured young adults are Figure 5

Uninsured Adults by Age and

full-time workers (Figure 5). An additional
Employment/Student Status, 2008
18% of uninsured young adults are part-time
workers. Similar to older adults who are Uninsured Young Adults
Age 19-29
Uninsured Adults
Age 30-64
working, employed young adults can have
limited access to employer-sponsored Not working
21% Not working
coverage. Full-time students comprise only Full-time
workers
28%
Full-time
3 Part-time
10% of uninsured young adults. Students worker
51%
Part-time
workers
57%
18% worker
may qualify for dependent coverage through Full-time
15%

their parents or may be able to obtain students

(age 19-24)
10%
coverage through their school. Students Total = 13.7 million uninsured Total = 23.9 million uninsured

without access to affordable group coverage Young adults who are not working include a small percentage who are part-time students and are not working. Student status is
only available for individuals age 19-24, so some of those considered to be part-time workers or not working may be older full-
time students. About half of young adults who are full-time students are also working part-time.
may be unable to purchase insurance since Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

their incomes are often limited while they

are in school. Although many young adults are continuing their education, the majority of
uninsured young adults are not students.

3
Data on student status is only available for young adults under the age of 25.

3
 Young adults have higher uninsured rates Figure 6

than older adults regardless of work Uninsured Rates by Age and

status (Figure 6). Since young adults are Employment/Student Status, 2008
just beginning their careers, they are often Uninsured Rates

unable to get the higher skilled, better paying Full-time students 19%
N/A
jobs that come with affordable health Young adults (19-29)
28% Other adults (30-64)
insurance. About three in ten working Full-time workers
15%

young adults are uninsured, almost twice the Part-time workers

23%
39%

rate of older working adults. 43%

Not working
23%

Differences between the uninsured rates of young adults and older adults are statistically significant (P<0.05). Young adults who
are not working include a small percentage who are part-time students and are not working. Student status is only available for
individuals age 19-24, so some of those considered to be part-time workers or not working may be older full-time students.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

Access to Employer-sponsored Coverage

Due to their age, young adults are less likely to have an affordable employer-sponsored
insurance option. Many young adults work in the types of jobs that do not offer coverage. Since
only 25% of all young adults are married, compared to 66% of older adults, most young adults
are unable to purchase coverage through a spouse’s employer if it is not offered through their
own job. Even if their employer offers affordable coverage, many young adults encounter the
waiting periods that new employees often face before they can enroll in employer-sponsored
insurance. Moreover, young adults who are offered coverage through an employer may have
difficulties paying their share of the insurance premium since they are just starting their careers
and have lower incomes than older adults. The average employee share of annual premiums for
individual coverage rose from $334 in 2000 to $779 in 2009.4

More than half of uninsured young adult Figure 7

Likelihood that Workers Are in Small Firms,

workers are employed in smaller firms, 2008
which are less likely to offer coverage
than larger firms. Access to employer- Percent of workers employed in firms with less
than 100 employees:
67%

sponsored coverage has declined over the 54%

past decade, with almost the entire decline

occurring among smaller employers. In 34%

2009, just 58% of firms with fewer than 100

employees offered employer-sponsored
coverage, compared to 99% of firms with
more than 500 employees.5 More than half Privately insured
young adults
Uninsured young
adults
Uninsured adults age
30-64
of both young uninsured workers and older Difference between privately insured young adults and uninsured young adults is statistically significant (p<0.05). Young

uninsured workers work in these small firms adults includes all individuals age 19-29.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

(Figure 7).

4
Kasier Family Foundation and Health Research and Educational Trust, "Employer Health Benefits 2009 Annual
Survey," (September 2009).
5
KFF analysis of the Kaiser/HRET Employer Health Benefits 2009 Annual Survey.

4 00
Uninsured young adult workers often Figure 8

Likelihood that Workers Are in Industries with

work in industries that have low rates of Low Employer-Sponsored Coverage Rates,
employer-sponsored coverage (Figure 8). 2008
Only half of all workers in the agriculture, Percent of workers employed in agriculture,
construction or service industries:
construction and service industries have 42% 40%
employer-sponsored coverage compared to
three-quarters of workers in other industries
(data not shown). Uninsured young adult 23%

workers are about as likely to work in these

industries as older uninsured adults.
Privately insured Uninsured young Uninsured adults
young adults adults age 30-64
Difference between privately insured young adults and uninsured young adults is statistically significant (p<0.05). Young adults
includes all individuals age 19-29.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

Job opportunities are limited for many Figure 9

uninsured young adults since they have Percent of Adults With No Education Beyond
lower levels of education than those with High School by Insurance Status, 2008
private coverage (Figure 9). Uninsured 64%
young adults are more than twice as likely as 60%

those with private insurance (60% vs. 28%)

to have no education beyond high school.
Uninsured young adults and their older 28%

counterparts have similar levels of

education. Without any higher education,
these adults often find their employment Privately insured Uninsured young Uninsured adults
opportunities limited and may have greater young adults adults age 30-64
Difference between privately insured young adults and uninsured young adults is statistically significant (p<0.05). Young adults
difficulty finding a job with employer- includes all individuals age 19-29.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

sponsored coverage. Only 10% of uninsured

young adults have a college degree, which leaves many higher skilled jobs out of reach.

Access to Public Coverage

Most low-income young adults are not currently eligible for Medicaid or the Children’s Health
Insurance Program (CHIP). Medicaid and CHIP play a significant role in providing coverage to
low-income children. However, when young adults turn 19, their coverage typically terminates
since adult eligibility for Medicaid is much more limited than child eligibility. As a result, only
13% of all young adults have public coverage compared to 31% of all children.

5
 Under current eligibility rules, low- Figure 10

income adults typically can only qualify Profile of Uninsured Young Adults, 2008
for Medicaid if they fall into certain Disabled, 2%
categories, including being pregnant, a
custodial parent, or disabled. Under
federal law, states cannot cover non-disabled Parents, 21%

adults without dependent children through

Medicaid unless they receive a waiver. Non-disabled
childless adults,
Overall, 21% of uninsured young adults are 77%

parents and 2% are adults with disabilities

(Figure 10). The remaining 77% are adults
13.7 Million Uninsured
without dependent children and therefore do Young Adults

not fall into a Medicaid eligibility category. Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

Medicaid income eligibility limits for Figure 11

adults are often very low. Almost half Poverty Rates for Young Adult Parents by
(48%) of uninsured young adult parents have Insurance Status, 2008
incomes below the poverty level (Figure 11), 60%

but these poor parents may not qualify for 48%

Medicaid. Medicaid income eligibility
thresholds vary by state, with cut-offs for
working parents in 34 states set below the
poverty line in 2009. In 17 states, eligibility 9%

cut-offs for working parents are set below

Privately insured Publicly insured Uninsured young
50% FPL (about $8,600 a year for a family young adult parents young adult parents adult parents

of three according to the Census poverty Differences in the poverty rates between these three groups are statistically significant (p<0.05). Young adults includes all
individuals age 19-29. There are a total of 10.6 million young adult parents.
thresholds). Eligibility levels for children Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

tend to be much higher than for their parents,

with 46 states and Washington, DC covering children with family incomes at or above 200%
FPL in 2009.6

II. Health Status, Access and Coverage Figure 12

Young Adults’ Health Insurance

Young adults in fair or poor health are Coverage by Health Status, 2008
more likely to be uninsured than those in
excellent health (Figure 12). While many Uninsured Medicaid/Other Public Private
Number
discussions about uninsured young adults Fair or poor
38% 36% 25%
2.3 M

cite their relatively good health as a reason 12%

`

why they have chosen to forgo health Good 40% 18% 42%
9.7 M

insurance, the data show that those in the 23%

Excellent or
best health are actually the least likely to be very good 27% 10% 64% 33.2 M

uninsured. About one-quarter of young

adults in excellent or very good health are
uninsured, compared to 38% of those in fair Data may not total 100% due to rounding.
Source: KCMU/Urban Institute analysis of 2009 ASEC Supplement to the CPS.

or poor health.

6
D. Ross, M. Jarlenski, S. Artiga and C. Marks, "A Foundation for Health Reform: Findings of a 50 State Survey of
Eligibility Rules, Enrollment and Renewal Procedures, and Cost- Sharing Practices in Medicaid and CHIP for
Children and Parents During 2009," Kaiser Commission on Medicaid and the Uninsured, December 2009.

6 00
Young adults have a range of health care needs. While most young adults are in excellent or
very good health, health needs evolve during young adulthood. Comprehensive health
insurance enables young adults to receive preventive services and screenings. For the 14% of
uninsured young adults who have a chronic condition, lack of insurance can be a barrier to
necessary care.7 These conditions require ongoing monitoring, which young adults with limited
incomes may forgo if they lack adequate coverage. Mental health conditions are among the
health problems that often develop during young adulthood. Many young adults suffer from
depression and 75% of all lifetime cases of diagnosable mental disorders begin by age 24.8
Young adults 18 to 25 year olds have a high prevalence of serious psychological distress, which
is highly correlated with mental illness. Although 19% of those age 18 to 25 experience serious
psychological distress, this age group shows the lowest rate of seeking help for these mental
health problems.9

Young adult women have additional health needs, as they are at an age when they require
reproductive health services. Having health insurance and consistent access to the medical
system may increase the likelihood that they receive timely pre-natal care if they become
pregnant.

Insurance makes a substantial difference Figure 13

in young adults’ ability to access needed Barriers to Health Care Among

care. More than half of uninsured young Young Adults, by Insurance Status, 2008
adults have no usual source of care, Percent of young adults (age 19 – 29) reporting:

compared to only 20% of those with private No Usual Source

56%
14%
coverage and 14% of those with public of Care
20%
Uninsured
coverage (Figure 13). About one in five Needed Care but Medicaid/Other Public
21%
uninsured young adults report that they were Did Not Get it
Due to Cost
7% Private
5%
unable to get needed care due to cost within (Past 12 Months)

the past year. Similarly, about one-quarter Could Not Afford

Prescription
24%
9%
of uninsured young adults said they could Drug (Past 12
Months) 5%

not afford a prescription drug they needed in Respondents who said usual source of care was the emergency room were included among those not having a usual source of care.

the past year. All differences between the uninsured and other insurance groups are statistically significant (p<0.05).
SOURCE: KCMU analysis of 2008 NHIS data.

Uninsured young adults often shoulder substantial financial burdens to pay for medical
care. One in ten uninsured young adults had more than $700 in out-of-pocket medical expenses
in 2007.10 Given their low incomes, these costs can be difficult to pay and may eventually be
turned over to collection agencies. A recent survey found that, after adjusting for differences
between the insured and uninsured, one quarter of low-income uninsured young adults report
having been contacted by a collection agency in the past year about medical bills.11 When young

7
KCMU analysis of 2008 NHIS data. Young adults who said they had ever been diagnosed with diabetes, cancer,
emphysema, heart disease, hypertension, stroke or had an episode of asthma in the past year were considered to have
a chronic condition.
8
M.J. Park, T.P. Mulye, S. Adams, C. Brindis, C. Irwin, “The Health Status of Young Adults in the United States,”
Journal of Adolescent Health 39 (2006) 305-317.
9
Substance Abuse and Mental Health Administration, “SAMHSA Launches Anti-Stigma Campaign,”
http://www.samhsa.gov/SAMHSA_News/VolumeXIV_6/article4.htm.
10
KCMU analysis of 2007 MEPS data.
11
G. Kenney and J. Pelletier, “Spotlight on Low-Income Uninsured Young Adults: Causes and Consequences,”
KCMU Issue Brief (June 2008).

7
 adults amass medical debt, it can have long-term consequences for their credit rating and can
impede efforts to save for the future and pay off student loans and other debts.

III. Current Approaches to Improve Health Care Coverage Among Young Adults

Although there has not been significant federal action to decrease the number of uninsured young
adults, states and private insurers have used a variety of strategies to target this population.
Some of these approaches have been incorporated into national health reform legislation that is
currently being debated.

Extension of Dependent Coverage Through Private Insurance

Twenty-five states have increased the age that children can be covered under their parent’s
private health insurance plan in the group insurance market (Figure 14).12 Many states increased
the dependent age to 25, while other states chose age 24 or 26. New Jersey allows dependents to
be covered up to age 30 in the group market and in Massachusetts, young adults are considered
dependents up to age 25 or for two years after they are no longer claimed on their parents’ tax
returns, whichever comes first.13 Most of the state laws apply to all young adults but the laws in
several states only apply to full-time students.

Figure 14
States Extending Dependent Coverage for Young Adults

NH
VT ME
WA
MT ND
MN MA
OR NY
ID WI
SD MI RI
WY CT
PA NJ
IA
NE OH
IN
NV IL DE
WV
UT
CO VA MD
CA KS MO KY
NC
TN DC
OK AR SC
AZ NM
MS AL GA

TX
LA

AK FL

HI

States that have extended the dependent coverage

age in the group market

NOTE: Several other states have extended the dependent coverage age in the individual market and small group market.
SOURCE: State Health Facts. Other State Protections: Dependent Coverage. Kaiser Family Foundation. Data as of
January 2009.

While increasing the age of dependent coverage will help some young adults, especially full-time
students, this policy approach is limited in its reach. Due to the policy's structure, it does not
benefit young adults whose parents do not have private coverage themselves. Young adults who
do not attend school, attend school part-time, are married, or who do not live in the same state as

12
State Health Facts. Other State Protections: Dependent Coverage. Kaiser Commission on Medicaid and the
Uninsured. Data as of January 2009.
13
MA HB 4850. Chapter 58 of the Acts of 2006. For full text:
http://www.mass.gov/legis/laws/seslaw06/sl060058.htm.

8 00
their parents are less likely to qualify for extended dependent coverage. Additionally, employers
may require employees to pay higher premiums in order to provide coverage to dependent
children, thereby making it unaffordable for some parents. Another drawback to this approach is
that these state laws do not apply to employers who insure employees by paying health care
claims themselves rather than contracting with an outside insurance company to provide
coverage. These self-insured employer plans are not subject to state insurance regulations and
therefore cannot be required to extend the age of dependent coverage. A recent study suggests
that 55% of employees are in self-insured plans, which are common among larger employers.14
Therefore, many private plans will be exempt from state requirements to extend dependent
coverage.

Health Care Plans Marketed to Young Adults

Recognizing that the lack of affordable health insurance is the primary barrier to young adults
obtaining coverage, states and private insurers have begun to develop plans specifically targeted
to this population. In general, these plans offer less comprehensive coverage and may require
higher cost sharing in exchange for lower premiums. As part of the comprehensive health care
reform plan in Massachusetts, which included a requirement that all adults purchase health
coverage, the state developed a specially designed lower-cost health insurance product for 18-26
year olds. Under these plans, benefit packages must be “reasonably comprehensive” and include
inpatient and outpatient services and physician services for physical and mental illnesses. Health
insurers that offer these products must include outpatient prescription drug coverage in at least
one of their young adult products. As of July 2009, over 6,000 individuals in Massachusetts
were enrolled in these young adult plans, 70% of whom chose a plan with prescription drug
coverage. Monthly premiums for these young adult plans ranged from $146 to $223 depending
on whether prescription drug coverage was included in the plan.15

Several private health insurers are also developing plans designed specifically for young adults.
Blue Cross Blue Shield and American Community Mutual Insurance Company are among the
first health insurance companies to target plans to young adults. Many of these plans have low
premiums but high deductibles and limited benefit packages. One insurer that has targeted
young adults is Tonik Health, an affiliate of Blue Cross Blue Shield, which offers health
insurance to young adults in six states (California, Colorado, Connecticut, Georgia, Nevada, and
New Hampshire). Three plans are offered in each state, and differ by deductible, premium and
co-payment costs. The health care plans that are offered also vary across states. For example, in
some states, Tonik only covers generic prescription drugs while in other states, there is a separate
deductible for brand name prescriptions.

14
J. Kronstadt, S. Mojerie, S. Schwartz, “State Efforts to Extend Dependent Coverage for Young Adults,” National
Academy for State Health Policy (December 2007).
15
Report to the Massachusetts Legislature: Implementation of Health Care Reform, FY 2009. October 23, 2009.
https://www.mahealthconnector.org/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServle
t/About%2520Us/Executive%2520Director%2520Message/Connector%2520Annual%2520Report%25202009.pdf

9
 A range of premium costs is presented online Sample of Tonik health care plans: Table 1 Figure 15

but actual premiums vary by age, gender, and Georgia Connecticut

medical history (Table 1). None of the Tonik “Thrill Seeker” plan “Calculated Risk Taker” plan

health plans cover maternity care through $77+/month $183+/month

Premium Cost
their basic benefits package, even though
women in this age group are of childbearing Deductible $5,000 $1,500
age.16 Tonik Health utilizes creative online
Copayment $20 $30
marketing strategies to attract young adults,
such as labeling their plans “Part-Time Limitations No maternity coverage,
12 month pre-existing
No maternity coverage,
$500 calendar year Rx
Daredevil” and “Thrill Seeker.” The website exclusion, $2,000 maximum
deductible for brand drugs
provides simple descriptions of the plans as
well as a short online application. These Source: Tonik Health. www.tonik.com. Georgia and Connecticut plans.
private health plans provide an option for Accessed on Dec. 15, 2009.

young adults to obtain some level of health

coverage, even if it not comprehensive and may not meet all of their current and future health
care needs.

Although insurers have developed health insurance specifically for young adults, these plans
have had a limited impact in lowering the number of uninsured young adults. Just 8% of all
young adults have private health insurance that they purchased on their own in the individual
market -- a far smaller share than the percent of young adults who have employer-sponsored
coverage (49%) or public health insurance, such as Medicaid (13%).

Expanded Availability of Public Coverage

Some states have expanded Medicaid or other state-based public coverage to more parents and
childless adults through a combination of waivers and state-funded programs. About one-in-five
(21%) of uninsured young adults are parents. While parents have some access to Medicaid,
eligibility in many states is very limited due to low federal minimum eligibility levels for this
group. However, some states have expanded access to Medicaid for parents. In 2009, 16 states
and Washington, D.C. provide Medicaid coverage for working parents with incomes at or above
the federal poverty level.17

Public coverage options for childless adults are typically more limited than for parents because
there are more federal restrictions on eligibility for this group. States can only cover these adults
if they obtain a waiver or create a fully state-funded program. Due to these limitations, only five
states provide coverage that is comparable to Medicaid and fifteen states provide more limited
coverage.18 Four states solely cover childless adults through premiums assistance programs that
subsidize private coverage for adults who meet employment-related eligibility requirements.19
State efforts to expand public coverage to a greater number of parents and childless adults enable
many young adults to gain insurance who would otherwise be uninsured. However, eligibility

16
Tonik plans in New Hampshire offer a maternity care rider.
17
D. Ross, M. Jarlenski, S. Artiga and C. Marks, "A Foundation for Health Reform: Findings of a 50 State Survey
of Eligibility Rules, Enrollment and Renewal Procedures, and Cost- Sharing Practices in Medicaid and CHIP for
Children and Parents During 2009," Kaiser Commission on Medicaid and the Uninsured, December 2009.
18
S. Artiga, "Where Are States Today? Medicaid and State-Funded Coverage Eligibility Levels for Low-Income
Adults," Kaiser Commission on Medicaid and the Uninsured, December 2009.
19
Ibid.

10 00
restrictions and state budget pressures prevent these programs from reaching more lower income
uninsured young adults.

IV. Young Adults and National Health Reform

Health reform legislation currently being debated in Congress aims to cover the vast majority of
the uninsured by creating new coverage opportunities and requiring most people to obtain
coverage. Given that nearly one-third of the uninsured are young adults, this population is a
main target of health reform efforts. Under legislation passed by the House (H.R. 3962) and by
the Senate (H.R. 3590), individuals would be required to have health coverage or pay a financial
penalty, with certain exceptions. In order to meet this requirement, young adults would have
various avenues through which to obtain coverage. These coverage options would result from
provisions that require employers to offer coverage or pay a penalty, expand Medicaid eligibility,
extend dependent coverage, create new health insurance Exchanges, and establish new insurance
market regulations (see Table 2).

Increase Employer Coverage

The health reform bills impose new penalties on employers that do not provide coverage to their
employees. The House bill requires employers to offer coverage to employees and contribute a
certain share of the premium cost, or pay a penalty equivalent to 8% of payroll. The Senate bill
does not technically require employers to provide coverage, but it assesses a fee on employers
who do not offer coverage and have at least one full-time employee who receives a premium
credit in the newly created state-based health insurance Exchanges. Given that half of uninsured
young adults work full-time, these employer responsibilities may increase the number of young
adults who are offered coverage by their employer. However, many uninsured young adults
work for small firms, which may be exempt from these coverage requirements.

Extend Dependent Coverage

Both health reform bills would extend the age that young adults can retain dependent coverage
through their parent’s private health insurance. The House bill allows dependents to remain on a
parent’s plan up to age 27, and the Senate bill allows dependents to remain on a parent’s plan up
to age 26. As previously discussed, 25 states have extended the age that dependents can remain
on their parent’s plan. As with many state dependent coverage laws, these provisions would not
apply to all young adults. Rules regarding who would qualify for this extended dependent
coverage would be determined through regulations. Under both bills, large employers with self-
insured health plans would be subject to these new regulations.

Expand Medicaid Eligibility

Health reform legislation would create a minimum Medicaid eligibility threshold for all
individuals under age 65 (children, parents, and childless adults) and eliminate a current
limitation of the program that prohibits most childless adults from qualifying for the program
today. Therefore, low-income young adults with and without children would be eligible for
Medicaid. The House bill expands Medicaid eligibility to 150% FPL and the Senate bill expands
Medicaid eligibility to 133% FPL. Under the House threshold, 61% of uninsured young adults
would qualify for Medicaid. The Senate threshold would extend Medicaid to 55% of uninsured
young adults. Under Medicaid, young adults would receive comprehensive benefits, would not
be required to pay a premium, and would have limited, if any, cost sharing.

11
 Table 2. Young Adult Coverage Provisions
Under Health Reform Legislation as of January 7, 2009
House Bill
Require most individuals to have
"acceptable health coverage." Those
without coverage pay a penalty of
Individual Mandate 2.5% of adjusted income above the
filing threshold up to the cost of the
average national premium in the
Exchange.
Require employers to offer coverage
or pay 8% of payroll. Eliminate or
Employer Coverage reduce the assessment for small
employers, based on payroll.
Expand Medicaid eligibility to 150%
Medicaid Eligibility FPL.
Dependent Extend dependent coverage to age
Coverage 27.
May purchase coverage through the
National Health Insurance Exchange.
Health Insurance
Exchange Provide premium and cost-sharing
subsidies to young adults with
incomes up to 400% FPL
Implement new insurance market regulations that prevent health insurers from
denying coverage and from charging more based on certain characteristics.
New Insurance Cap out-of-pocket costs and provide preventive services with no cost-sharing.
Market Regulations Allow premiums to vary based on age
by a 2 to 1 ratio. Does not allow
premiums to vary based on gender.
Special Young
Adult-Targeted No special plans.
Plans
12 00
Senate Bill
Require most U.S. citizens and legal
residents to have qualifying health
insurance, with certain exceptions.
Those without coverage pay a tax
penalty of the greater of $750/year up
to $2,250/family or 2% of household
income.
Assess employers with more than 50
employees that do not offer coverage
and have at least one full-time
employee who receives a premium tax
credit a fee of $750/employee.
Employers with 50+ employees pay
the lesser of $3,000/employee that
receives a premium credit or
$750/employee.
Expand Medicaid eligibility to 133%
FPL.
Extend dependent coverage to age
26.
May purchase coverage through the
state-based American Health Benefit
Exchanges.
Provide premium subsidies to young
adults with incomes up to 400% FPL
and cost-sharing subsidies to those
100-200% FPL.
Allow premiums to vary based on age
by a 3 to 1 ratio. Does not allow
premiums to vary based on gender.
Allow young adults up to age 30 to
enroll in a catastrophic health plan.
Young adults would not receive
premium subsidies for this plan.
Create Health Insurance Exchanges and Implement New Insurance Market Regulations
If young adults are not offered coverage through their employer, do not remain a dependent on
their parent’s plan, and are not eligible for Medicaid, they would be eligible to purchase
coverage through newly created health insurance Exchanges (referred to as a National Health
Insurance Exchange in the House bill and state-based American Health Benefit Exchanges in the
Senate bill). Individuals and small employers would be able to compare health insurance plans
and purchase a plan through these Exchanges. In order to make coverage more affordable,
premium subsidies would be available for young adults with incomes up to 400% FPL.
Therefore, 33% - 39% of uninsured young adults would receive premium subsidies in the
Exchange. Most of the remaining uninsured young adults would qualify for Medicaid, with only
6% of uninsured young adults paying the full premium cost. In both bills, health plans in the
Exchanges would include a minimum set of benefits that would provide comprehensive health
coverage, including no cost-sharing for preventive services.

Although most of the health plans in both bills would provide comprehensive coverage, the
Senate bill allows young adults up to 30 years old to purchase a catastrophic health plan.
However, they would not receive premium subsidies to help them purchase this coverage.
Therefore, it might be more affordable for a young adult to purchase coverage through the
Exchange and receive a federal subsidy than to purchase more limited catastrophic coverage.

New insurance market regulations in both bills would prevent health insurers from denying
coverage to young adults for any reason, including their health status, and from charging people
more based on their health status, gender, or occupation. However, premium rates would still be
allowed to vary by age (by two to one in the House bill and three to one in the Senate bill). This
would leave young adults paying lower premiums than older adults, but some young adults
would still pay more than they would without age rating restrictions. However, most young
adults would qualify for premium subsidies and would therefore be shielded from the full cost of
their coverage. Currently, most states have no limits on how much health insurance premiums
can vary based on the age of the beneficiary. As young adults age, they would eventually benefit
from restrictions on premiums for older individuals in the Exchange.

V. Conclusion and Policy Implications

Strategies to lower the number of uninsured in the U.S. are gaining attention during the national
health reform debate. Since young adults have the highest uninsured rate of any age group,
improving their ability to attain affordable coverage would be a key step in lowering the number
of uninsured Americans. Without insurance coverage, these young adults risk both their physical
health and their financial security at a time when they are beginning their adult lives.

National health reform legislation being debated in Washington aims to decrease the number of
uninsured by expanding access to both private insurance and Medicaid. These policies have the
potential to reach most uninsured young adults, the majority of whom have low-incomes that
would qualify them for either Medicaid coverage or subsidies for private insurance purchased
through a health insurance Exchange. Given that most uninsured young adults have very low
incomes, adequate premium and cost-sharing subsidies will be crucial to ensuring that this
population signs up for health coverage and can obtain the health care services they need.

13
 Appendix
Uninsured Young Adults (Ages 19-29), 2008
All Young Percent of All Uninsured Percent of Uninsured
Adults Young Adults Young Adults Uninsured Rate for Young
(millions) (millions) Young Adults Adults

Total - Young Adults 45.3 100.0% 13.7 100.0% 30%

1
Family Poverty Level
<150% 18.6 41% 8.4 61% 45%
150-199% 4.6 10% 1.7 12% 37%
200-299% 7.6 17% 2.0 14% 26%
300-399% 4.9 11% 0.8 6% 17%
400%+ 9.6 21% 0.8 6% 9%

Family Income
<$20,000 17.9 40% 8.1 60% 46%
$20,000 - $39,999 11.7 26% 3.7 27% 32%
$40,000 - $59,999 5.9 13% 1.0 7% 17%
$60,000 + 9.8 22% 0.8 6% 8%
2
Work/Student Status
Full-time worker 25.6 56% 7.0 51% 28%
Full-time student (age 19-24) 6.8 15% 1.3 10% 19%
Part-time worker 6.2 14% 2.4 18% 39%
Non-Workers 6.7 15% 2.9 21% 43%

Education
Less than high school 5.5 12% 2.9 21% 52%
High school graduate 13.4 30% 5.3 39% 39%
Some college/Assoc. degree 17.1 38% 4.2 30% 24%
College grad or greater 9.2 20% 1.3 10% 15%

Gender
Male 22.8 50% 7.9 58% 35%
Female 22.5 50% 5.8 42% 26%

Age
Age 19-24 24.3 54% 7.5 55% 31%
Age 25-29 21.0 46% 6.2 45% 30%

Marital Status
Married adults 11.3 25% 2.4 18% 22%
Not married 34.0 75% 11.2 82% 33%

Parent Status
Parent 10.6 23% 2.9 21% 27%
Not a parent 34.8 77% 10.8 79% 31%

Health Status
Excellent/Very Good 33.2 73% 8.9 65% 27%
Good 9.7 22% 3.9 28% 40%
Fair/Poor 2.3 5% 0.9 7% 38%

Race/Ethnicity
White only (non-Hispanic) 27.6 61% 6.4 47% 23%
Black only (non-Hispanic) 6.1 13% 2.2 16% 36%
Hispanic 8.5 19% 4.1 30% 48%
Asian/S. Pacific Islander only 2.1 5% 0.6 4% 29%
Am. Indian/Alaska Native 0.3 1% 0.1 1% 40%
Two or More Races 0.7 2% 0.2 1% 30%

1
The Census poverty level threshold for a single person under age 65 in 2008 was $11,201 per year. The threshold for a family of four was
$22,025. The term family as used in family income and family poverty level is defined as a health insurance unit (those who are eligible as a
group for "family" coverage in a health plan).
2
Student status is only available for young adults under age 25. Some of those age 25-29 considered to be part-time or non-workers may be
older students. Also, those who are working full-time and attending school full-time are categorized as full-time workers.
Source: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of the 2009 ASEC Supplement to the CPS

14 00
1330 G STREET NW, WASHINGTON, DC 20005
PHONE: (202) 347-5270, FAX: (202) 347-5274
WEBSITE: WWW.KFF.ORG/KCMU

This publication (#7785-02) is available on the Kaiser Family Foundation’s website at www.kff.org.
Additional copies of this report (#0000) are available
on the Kaiser Family Foundation’s website at www.kff.org.

The Kaiser Commission on Medicaid and the Uninsured provides information and analysis on health care coverage and access for the low-
income population, with a special focus on Medicaid’s role and coverage of the uninsured. Begun in 1991 and based in the Kaiser Family
Foundation's Washington, DC office, the Commission is the largest operating program of the Foundation. The Commission's work is
conducted by Foundation staff under the guidance of a bi-partisan group of national leaders and experts in health care and public policy.