The Affordable Care Act has given 13.7 million young adults access to health insurance, but medical expenses remain a significant source of debt, according to the Commonwealth Fund.
Medical expenses remain a significant source of debt for young adults, despite the increased access to health insurance created by the Affordable Care Act of 2010, according to a report released today by the Commonwealth Fund.
An estimated 13.7 million adults ages 19 to 25 remained on or joined their parent’s health insurance plans between November 2010 and November 2011, according to Commonwealth, a foundation that aims to improve access, quality and efficiency in the U.S. health care system. Roughly half these young adults – 6.6 million – would not have been able to stay on their parents’ plans before the Affordable Care Act was enacted.
Historically, adults ages 19 to 29 have been the most uninsured age group in the U.S. for many years, according to Commonwealth. Dependents lost coverage when they either graduated from college, or graduated from high school and did not attend college. Youth eligible for public programs such as Medicaid typically lose coverage when they turn 19, according to the Commonwealth Fund. The Affordable Care Act addressed this gap in coverage for medical expenses. The law requires insurance plans with dependent coverage to insure adult children up to the age of 26. Still, not all young adults have parents with eligible plans, and 39 percent of Americans ages 19 to 29 went without health insurance for all or part of 2011.
“Young adults who join the labor force are still establishing themselves and often lack permanent employment – and thus a source of health insurance – or work in jobs that do not include health benefits,” stated the Commonwealth report. Slow job growth is a contributor to these trends.
Lack of health insurance and rising medical expenses poses significant health and financial risks. Sixty percent of uninsured young adults said they had foregone needed health care in the past year because of the cost, compared to 41 percent of young adults with health insurance, reported Commonwealth. More than half (51 percent) of uninsured young adults said they had problems paying medical expenses, or were paying medical debt over time, compared to 36 percent of young adults with insurance. (Millionaire Corner research shows that many older Americans are also struggling to pay medical expenses.)
Medical expenses were forcing many young adults to make difficult trade-offs, according to Commonwealth. Among those struggling to pay medical expenses, one-third took on credit card debt and 32 percent had become delinquent on other payments, such as school loans. More than 30 percent delayed their education or career, and 28 percent had trouble paying for food, rent and other basics. (Unpaid medical expenses burden most Americans according to Millionaire Corner research.)
Personal debt levels pose a significant concern to 36 percent of young investors (age 40 and under) surveyed by Millionaire Corner in April, and another 26 percent expressed mild concern about the levels of debt. While education costs rank as the primary source of debt, more than one-fourth of young investors report personal debt due to “unexpected medical expenses,” ranking medical expenses as the second most common source of debt.