Health Insurance Coverage of Young Adults

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Abstract

Nearly one in three young adults ages 19 to 26 lacks health insurance coverage. This age group is at high risk of lacking insurance coverage because of low access to employer-sponsored insurance and subsidized public coverage. Given that so many uninsured young adults are low-income, significant public subsidies will be needed to address their uninsurance problem. Some policy options available include public program expansions, tax credits, direct subsidies, or individual mandates. Ultimately, decisions about allocating greater public subsidies for covering young adults or imposing mandates should be made in the context of considerations about broader health care reform.

Introduction

Given that such a large and growing share of young adults ages 19 to 26 lacks health insurance coverage, increasing policy attention has been focused on addressing coverage gaps among young adults. Fully 10.3 million young adults—or one in three (32 percent)—lack health insurance coverage. While young adults constitute 18 percent of the adult population, they make up 28 percent of the uninsured adult population (Exhibit 1). Almost half (49 percent) have employer-sponsored insurance (ESI) coverage, 10 percent have Medicaid/other public coverage, and 10 percent have non-group coverage (Exhibit 2).

As shown in Exhibit 3, as children transition to adulthood, they lose both employer-sponsored insurance (ESI) and Medicaid coverage at high rates. The sharp declines in ESI and Medicaid coverage are due to restrictions on employer policies that often limit dependent coverage to full-time students after age 18 or 19 and less expansive Medicaid/SCHIP eligibility policies for young adults compared to those for children ages 18 and under. As young adults move into their late 20s, they gain ESI coverage, which brings down their uninsured rates.

Among young adults, the likelihood of coverage varies across a number of different characteristics, including income, citizenship status, and whether or not they are full-time students. Young adults with incomes less than 200 percent of the federal poverty level (FPL) are 2.6 times more likely to be uninsured compared with those with higher incomes (44 vs. 17 percent) (Exhibit 2). While lowerincome young adults are more likely to have Medicaid/SCHIP coverage relative to higher-income young adults (16 vs. 3 percent), they are much less likely to have ESI (29 vs. 73 percent). Young adults who are noncitizens are over twice as likely as those who are citizens to lack health insurance coverage (60 vs. 28 percent) but make up just 22 percent of all uninsured young adults (Exhibit 1).

Full-time students are half as likely as nonstudents to lack health insurance coverage (19 vs. 39 percent), and it appears that 1.9 million, or fewer than one in five, uninsured young adults are students (data not shown). Consistent with the patterns found among all adults, uninsured rates are higher among young adults who are Hispanic, noncitizens, and among those who are not married.

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