WKU News

By Laura Ungar and Patrick Howington

Barely 30 years old and without health insurance, Amy Schmidt lay on her bedroom floor in December, partially paralyzed by a stroke.x Asked by emergency workers which hospital she wanted to go to, she responded: "Whatever one's cheaper."

Schmidt - who faced months of therapy and thousands of dollars in medical bills that threatened to bankrupt her - is part of the biggest and fastest-growing age group among the uninsured: young people just beginning their adult lives.

Census figures show that between a quarter and a third of people ages 20 to 30 in Kentucky, Indiana and the United States were uninsured last year - about 13.4 million Americans and 394,000 Kentuckians and Hoosiers.

Nationally, the number of uninsured young people has risen 39 percent since 1987, from 9.6 million, according to the U.S. Census. Other surveys show the numbers rising locally, too. A Kentucky Health Issues Poll conducted this year said 36 percent of Kentuckians ages 18 to 29 - or 239,760 people - are uninsured.

Like Schmidt, a hairdresser who earned about $30,000 a year, a substantial number of uninsured young adults have at least some college experience, come from middle-class backgrounds and are working to build similar lives. Almost three-quarters of uninsured young people, or about 9.8 million people, have household incomes of at least $25,000 a year.

When they fail to pay their medical bills, the cost is eventually paid by everyone else, in the form of higher health-care fees, insurance rates and taxes.

A major reason young adults often don't have health insurance is that they are more likely to work in the increasing number of jobs that don't offer it. A 2007 survey by The Commonwealth Fund, a New York-based research organization, found that only about half of workers 19 to 29 years old, or about 18.9 million people, were eligible for coverage at work, compared with three-quarters of workers ages 30 to 64, or about 81.9 million people.

But there are other reasons. Experts say that young people sometimes can't afford premiums for insurance offered at work, and often can't buy insurance on their own, because they earn much less than older workers. Or they just feel invulnerable and spend their money on other things.

To help keep people insured, Kentucky this year became the 18th state to require that insurers let unmarried young adults who are financially dependent stay on their parents' health plans. Kentucky's age cutoff is 25; Indiana's is 24.

"A significant illness or injury can be financially devastating even with health insurance, much less without," Gov. Steve Beshear said when asked about the state's response. "This issue has been and will continue to be a priority for this administration."

But some experts say that, while government can help, young people also need to make a greater effort to get insurance, which would keep premiums lower for others by adding healthy adults to insurance plans.

"If you're 25 years old, you may not view (health care) as valuable," said Mitch Roob, secretary of the Indiana Family & Social Services Administration. "So you may make a purchasing decision that a new motorcycle or a Louis Vuitton purse is more important."

Others argue that young people view insurance as a priority but find it increasingly beyond their reach. Even for workers at major companies, which provide the most comprehensive and subsidized coverage, employee costs have nearly tripled since 2001.

For Schmidt, whose job didn't provide health benefits, an unexplained incident of brain swelling eight years ago meant privately purchased insurance would have cost at least $400 a month - too expensive, she said, given that she was taking about $400 a month in medications. So she reluctantly gambled she would be all right - and lost.

"Bad things do happen to all of us at all ages," said Commonwealth Fund President Karen Davis. "Failure to be protected when these events come along has consequences for the entire society because they have bills they can't pay. Someone else winds up holding the bag."

HIGH HURDLES
Economy, jobs make coverage elusive

It's not unusual for young people to face gaps in insurance during their life transitions - from home to college, from college to employment, and between jobs. And traditionally, many worked in part-time jobs that didn't offer benefits.

But in today's rapidly changing economy, young people are more likely than ever to be uninsured. Small businesses, which often hire young adults, increasingly don't offer health benefits. One study found that 42 percent of companies with fewer than 100 employees didn't offer coverage last year - about 2.5 million companies.

Young adults "are entering an economy that is much less stable and benefit-rich than the one that their parents entered," said Tamara Draut of the New York policy and research organization Demos. "Today's 20-somethings are likely to be the first generation to not be better off than their parents."

Once, manufacturing jobs were an entry into the middle class for young men who lacked college degrees. They offered good pay and benefits. But those jobs have given way to lower-paying service jobs.

"A generation ago, General Motors was the nation's largest employer," said Draut, an expert in young adults' economic challenges. "Today the nation's largest employer is Wal-Mart."

In Jefferson County, the number of manufacturing jobs declined by half between 1970 and 2006, according to Department of Commerce data - a loss of nearly 48,000 jobs.

Those jobs, which paid an average of $60,986 in 2000, were replaced by retail or service jobs paying half that or less. At the same time, some employers shifted work to freelancers to cut the need for full-time workers.

All these changes hit the young hard, with median family income for householders under 25 dropping 11.5 percent between 1979 and 2005, to $28,691 after adjusting for inflation.

Health insurance among that age group has seen an even sharper drop. In 1979, nearly two-thirds of recent high school graduates had employer-sponsored health insurance; 25 years later, only one-third did. Recent college graduates fared much better, but still lost ground - while also facing student loan debt that has doubled since 1993, to $19,000.

The cumulative effect of the changes can weigh down even a young adult with a good education and well-defined career path.

Michelle Graham, 29, a 2007 University of Kentucky graduate, has a degree in social work - and $35,000 in student-loan debt.

Graham, of Lexington, has been uninsured since February, when she left a larger company to work for a small substance-abuse counseling firm for $26,000 a year.

This summer, she had to rely on a charity program called Surgery on Sunday, for which she volunteers, to get a breast-reduction operation to relieve severe back problems.

"You see all of these other people and all of a sudden, you're one of them," she said. "I went to college. I thought I did everything right. You don't really know how big an issue insurance is until you don't have it."

'YOUNG INVINCIBLES'
Some young people don't see the need

Not all young people put that high a priority on insurance.

Stephanie Spencer, 21, a sometime college student and coffee shop barista, dropped her insurance coverage over a $12-a-month premium increase. She did so even though insurance helped cover $15,000 in medical bills after a bicycle accident last fall.

When her Anthem plan rose to $52 a month, Spencer felt she couldn't afford that on her $6,000 income.

"It was kind of like, 'Why bother?'" she said, reasoning that if she got sick, she could go to one of the Family Health Centers in Louisville, which charges the uninsured on a sliding scale based on income.

In the eyes of some, such attitudes have become the stereotype for this age group, branded "the young invincibles."

"They don't think about (insurance) until they get sick. There is a fundamental irresponsibility among a lot of people," said Lexington lawyer Larry Forgy, president of Health Kentucky, which helps the poor pay for medicines. "I don't have much sympathy."

Forgy said his organization once ran radio ads for a $35-a-month plan offering young adults coverage for catastrophic medical problems, but discontinued the effort because of low response.

"They're so young and the insurance for them is as cheap as can be. Why are they not covering themselves?" said Etti Baranoff, associate professor of insurance and finance at Virginia Commonwealth University.

But while premiums for young people are generally lower than for older ones, so are salaries. And for young people seeking comprehensive coverage or those with pre-existing illnesses, premiums may reach several hundred dollars a month.

This is one reason only 27 percent of young adults who said they were in very good or excellent health were uninsured, according to a Kaiser Family Foundation survey. Among those who answered they were in worse health, 40 percent were uninsured.

"In my experience, young people would prefer to have health insurance. But they have a limited amount of funds, and they have to make a decision," said Kay Roberts, a nursing professor at the University of Louisville who directs a downtown clinic. Like other medical professionals at similar clinics, she said she's seen a growing number of young and uninsured patients seeking affordable care.

While many of UofL's more than 20,000 students are still on parents' insurance policies, cost is the main reason only 2,500 of the others are enrolled in an insurance plan the university offers for $1,750 a year, said student government president Rudy Spencer. Most opt to pay a $100 per semester fee for campus medical services.

"It's all an economic issue," said Rudy Spencer, 21. "If students had the extra money, they would spend it on health insurance."

Studies back up the contention that young people value coverage. One found that nearly as many employed young adults as older workers accepted insurance when their job offered it - 78 percent of workers 24 to 29, which translates to 16.3 million people.

"That was actually really important to me," said Sara Kandt, 23, who gets insurance as an office assistant at the American Cancer Society in Louisville.

Pam Swisher is one of several uninsured young people who said they'd like to have coverage.

"I would be more than happy to pay for it if it was more affordable," said Swisher, 28.

She has been uninsured for more than four years, since she began managing the now-closed Atomic Saucer coffee shop in Germantown. Today she works as a freelance proofreader while studying for a bachelor's degree in motion-picture editing.

The daughter of an accountant, she said she always hoped to have the same kind of health benefits she grew up with. But after shopping around for insurance, she decided she couldn't afford it. Monthly premiums would have been $100 or more, and Swisher's income is about $11,000 a year.If she could get coverage, she said, "a weight would be lifted off my shoulders."

'RUSSIAN ROULETTE'
Financial fallout can be disastrous

Without insurance, Swisher said she'll usually "rest and tough it out" when she's sick rather than take costly prescription drugs.A 2007 national survey by The Commonwealth Fund found that two-thirds of 19- to 29-year-olds who had a time without insurance in the previous year - or 12.2 million people - similarly skipped care.

"This is an age you want people to be health-conscious," Davis said. "You want them to develop a connection with health providers and be checked for diseases."

Otherwise, they could face serious consequences later. "There are plenty of people with high cholesterol and high blood pressure who don't know it," said Dr. Julia Richerson, medical director of Family Health Centers in Louisville. "That causes permanent damage to vessels in the body that can lead to strokes and heart attacks."

Also, certain conditions, such as pregnancy and HIV, are more likely to occur when people are young, as are injury-related visits to emergency rooms. And obesity is a growing threat; federal figures show that 26 percent of 25- to 34-year-olds are obese, which works out to about 10.4 million people.

Without health insurance, Roberts said, "it's like Russian roulette."

And when the bullet hits, the financial fallout can be disastrous.

About half of uninsured young Americans in the Commonwealth Fund survey reported medical bill problems or debt, which translates to 9 million people. Twenty percent, or 3.7 million people, said they had been contacted by a collection agency.

Such problems can affect a young person's ability to establish themselves financially.

Schmidt, the former hairdresser, said she had hoped to be settled in a good job and a house of her own by this point in her life. Instead, her December stroke - which doctors blamed on smoking and birth-control pills - has left her too sick to work and living in an upstairs apartment in her parents' house.

Bills totaling more than $66,000 - most for 26 days of care at Baptist Hospital East - were discounted to $17,420. Schmidt was just notified that she received Social Security disability - which is financed by tax dollars - and said she hopes that it will pay her medical bills so that she doesn't have to declare bankruptcy.

Schmidt said financial worries add to the stress of recovery from the stroke, which hampers movement on her left side and affects short-term memory. She got months of free care from occupational therapist Eric DeYoung, who said "she probably wouldn't be able to use her arm" without it.

Schmidt, who has quit smoking, estimates she's about "80 percent of the way back." But she's not sure; she hasn't been able to afford MRI and CT scans to check her progress.

Her mother, Sherry Schmidt, said she did all she could to ensure her daughter wouldn't face such a predicament, instilling a work ethic, sending her to Catholic school and helping pay for community college."My husband and I are just hard-working middle-class people. We've always tried to provide" for her, she said. "Every parent wants better for their child."

But Draut said the shifting economy and rising numbers of uninsured are eroding such dreams - and everyone needs to be concerned.

"If ... this generation is worse off and the generation behind it is also," she said, "then I think we're looking at real damage to how we view the promise of America."

Reporter Laura Ungar can be reached at (502) 582-7190; Reporter Patrick Howington can be reached at (502) 582-4229.

http://www.courier-journal.com/cjextra/healthinsurance/stories/index.html at courier-journal