NCPA - National Center for Policy Analysis


March 17, 2005

Young adults are the largest group of adults without health insurance, reports Thomas Lee of the Minneapolis Star Tribune.

Based on state data, which largely reflect national trends, those between the ages of 19 and 34 are shying away from buying health insurance. Observers say this is a demographic that could potentially lower health care premiums of others if they joined the insurance pool.

According to the Minnesota Department of Health:

  • In 2004, about 17 percent of the state?s 18- to 24-year-olds chose not to buy health insurance, up from 14 percent in 2001.
  • About 13 percent of 25- to 34-year-olds did not have health insurance, compared to approximately 9 percent three years ago.

Young adults who choose not to buy health insurance do so for a variety of reasons: They are generally less likely to require medical attention or long-term care; they are self-employed or working for smaller employers that do not offer health benefits; or they are working at temporary or part-time jobs.

Although healthy young adults would make ideal, lucrative customers, most insurance companies have traditionally focused more on group coverage than pricey individual policies. That might change with the new health savings accounts (HSAs) introduced by the Bush administration in 2003.

  • To help pay for medical expenses, HSAs allow individual Americans to deposit between $1,000 and $5,100 in a tax-free savings account that can roll over into the next year.
  • The accounts are paired with high-deductible health plans with lower monthly premiums, a concept that might attract younger, healthier people.

Like President Bush's idea for private Social Security retirement accounts, HSAs will appeal to younger Americans who want more control over their money and medical decisions, says Conrad Meier, a senior fellow in health policy at the Heartland Institute, a think-tank in Chicago.

Source: Thomas Lee, "Young, ailing and uninsured," Minneapolis Star Tribune, March 13, 2005.


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