Generation Debt: The New Economics of Being Young By Solana Pyne
With health insurance out of reach, a generation braces itself for the worst http://www.villagevoice.com/issues/0428/pyne.php
If they're not outright poor as a class, young adults in this country are at least very, very broke. The average collegian graduates with more than $20,000 in debt, headed for a job market where real hourly wages have kept pace with neither inflation nor the cost of living. Young adults are broke in part because of their unprecedented schooling in the latest census figures, 28 percent of those between 25 and 29 reported holding a bachelor's degree which promised to pluck them away from the constellation of problems plaguing America's underclass, whether it was trouble with housing or inadequate medical care.
Yet there they are, these latest inheritors of the American dream, lined up in emergency rooms for toothaches and the flu, not because they're having emergencies, but because they don't have health insurance, and emergency rooms, unlike private doctors, are obliged to give them care. Since 1987, the number of uninsured young adults has grown at twice the rate of older adults, even though the demographic itself is shrinking. One-quarter to one-third of adults under 35 went without insurance for all of 2002, the most recent year for which statistics are available an increase of 1.2 million from the year before. Half were uninsured for some part of 2002. Of the 43.6 million uninsured adults in the U.S., 41 percent are young.
Of all the rationales John Kerry and George Bush will give this year as they stump for their individual visions of helping the nation's uninsured, one of the most pragmatic is that those little plastic cards can make the difference, for a crucial group of consumers, between having a financial parachute and cratering into debt.
Maria Davidson, of Meriden, Connecticut, was 26 and working for low pay with no benefits when her seven- year-old son tried to kill himself. The ambulance took him to Yale-New Haven Hospital. She had no private coverage for herself and her family. Her children were not eligible for public plans, and she wasn't aware of programs that could have covered the hospital expenses. Her son amassed $3,900 in bills that Davidson just couldn't pay. That was nine years ago. By the time the bill was resolved as the result of a lawsuit, she owed, with interest, over $6,000. Collection agencies were garnishing her wages and had put a lien on her condo.
Much of her story is sadly typical. A survey published in May by the Commonwealth Fund, a nonprofit based in New York City, found that of the uninsured between 19 and 29, half had trouble making payments, had been contacted by a collection agency, or had modified their lifestyles to pay off medical bills.
And the cost hardly stops with lost purchasing power. The Commonwealth Fund's survey found that more than half of those young and not covered had gone without needed medical care in the last year, which included not seeing a doctor, failing to fill a prescription, or skipping a recommended medical test, treatment, or follow-up visit.
Long Islander Fred Gumm, 26, now has health insurance through his job at Starbucks, which, he said, is "pretty much the only reason I work there." He went without coverage for two and a half years, during and after school at SUNY-New Paltz. While uninsured, he broke a few fingers and injured his shoulder and his back. He didn't go to the doctor because he couldn't afford the bill, and as a result, the injuries healed badly and still trouble him.
The story for middle-class kids these days is that you're covered by your family's insurance until you graduate college, and then you're on your own. For those not in school, the cutoff comes even sooner. "You turn 19 and lose your parents' coverage," said Sara Collins, an economist for the Commonwealth Fund.
In theory, you quickly get a job that comes with insurance. That's the way our system is designed to work, with employers rather than the government providing coverage. But as premiums have risen, companies have begun to consider forgoing health plans. In September, the trade journal BenefitsNews.com reported that among companies with 10 to 49 workers, the percentage of those offering insurance dropped from 66 percent to 62 percent. That four-point dip may not sound like much, but the journal estimated it could represent some 200,000 businesses. What's more, young people tend to work for smaller firms think entrepreneurial start-ups and only 55 percent of companies with fewer than 10 workers carry health plans. A May 2003 report by the Commonwealth Fund found that 65 percent of working young adults are eligible for an employer-sponsored plan, compared to 77 percent of older adults.
What looked like a relatively seamless transition for your parents looks for you like a rickety bridge. You're not making much money, you've got student debt, the job market stinks, and what jobs exist aren't promising much. "The kinds of jobs you're eligible for are the kinds that often don't come with health insurance," Collins said.
America's approach to paying for medical care stretches back to World War II, when regulations made accident and health insurance for employees tax-exempt. Meanwhile, a simultaneous wage freeze and worker shortage encouraged employers to offer insurance as a perk to attract labor, explained Ken McDonnell, a research analyst with the Employee Benefit Research Institute.
During the same period, England instituted universal coverage. The reasons we didn't are a complex knot of social and political influences now nearly impossible to untangle. "I think part of it is who's being served here. In more homogeneous societies, like in Scandinavian countries, [universal health care] came as a no-brainer," said David Jones, the president of the Community Services Society, a New York nonprofit. "But we're not homogeneous. There's a sense that 'We've got ours, I'm not sure I want to give it to those guys.' "
As employer-sponsored insurance took hold, the number of uninsured dropped steadily, reaching an all-time low of 23 million in 1976. But the very availability of good care quickly drove premiums up. In the 1980s, health care costs exploded, with annual increases peaking at 18 percent in 1989, before slowing briefly in the 1990s. Increases hit the double digits again in 2001, and reached 13.9 percent last year.
Perhaps not surprising, companies began to balk at providing benefits, leading individuals the self- employed, the unemployed, the employed but not covered to go it alone. Reforms designed to help the older and sicker buy private insurance served to further squeeze the able-bodied but vulnerable. Prices today are all over the map. A young, healthy adult in California can find basic catastrophic coverage for under $100 a month, but the same person would have to pay $280 for a similar plan in New York, largely due to differing state regulations.
For Lars Russell, in his early twenties, the cost of health insurance came as a shock. He graduated last year from the University of Michigan and moved to New York. "It's not really anything I can afford," he said in November. "I don't even have car insurance right now."
Russell would get little sympathy from McDonnell, the benefits research analyst. "That's life," he said, when asked about the huge number of uninsured young adults. "If you're young and healthy, you're going to take risks. It's life everywhere."
McDonnell cited an unwillingness to pay for insurance as a big reason young adults go without coverage.
It's a fine line, however, between being unwilling to pay even $100 a month and being unable to. And it's significant that when offered health insurance by an employer in exchange for a deduction from each paycheck, 74 percent of young adults take it, just a hair less than the 79 percent of older adults who do the same. "The argument is that if it's that important to you, then get a job that offers health insurance," said McDonnell, who, like so many experts on health care issues, is over 35 and has long had jobs with good benefits.
Janet Murray who asked that her name be changed because of pending litigation followed McDonnell's advice. Now in her late twenties, she was born with hypothyroidism and takes daily medication. During her first year of college in upstate New York, she contracted Lyme disease. Because she caught it early, she doesn't need constant treatment, though she is prone to exhaustion and respiratory infections like pneumonia. Her health problems don't prevent her from working, but they make it impossible for her to do without good insurance. Murray studied film in college but gave up on her dream of working in movie production. Instead, she took an office job with a media company because it came with benefits.
"I think the biggest thing for me was, if I had the stamina and I didn't have the general expenses of being on a bunch of medication, I would have taken more risks," Murray said. "I feel like I don't really have that luxury."
Maybe her dreams wouldn't have panned out, but the American health care system has made it nearly impossible for her even to try.
Or maybe Murray is lucky. At 21, Pedro Jimenez of South Williamsburg said he has never had health insurance at all. "I don't really know anything about it, to be honest," he said. When necessary, he has gone to the emergency room and tried to pay off the bills in installments. Otherwise, he has avoided going to the doctor. But basically, he has avoided thinking about the dangers, focusing instead on looking for work, getting his GED, and going to college.
It's important to note that degrees of coverage vary greatly by race: African Americans were nearly twice as likely as non-Hispanic white people to be uninsured in 2002, and Latinos three times as likely.
Not having a job with benefits can mean being forced to choose between health insurance and other expenses, some of them critical to building a so-called life. Young adults "are in a stage where people have debts from school, they are trying to buy a house, and that seems more important than paying for health insurance, which might cost multiple thousands each year," said Robert Blendon, a professor of health policy and political analysis at Harvard University.
The types and prices of plans for sale vary dramatically by state, largely according to regulations. Premiums nationwide for those under 35 average about $136 per month, according to eHealthInsurance, a website that sells individual and family insurance. Many states have plans with premiums below $100 for young, healthy adults without any pre- existing conditions. Cheaper plans are usually for emergencies only, don't cover routine doctor visits, and carry four-digit deductibles.
At age 22, Kristen Gass had minor outpatient surgery to remove pre-cancerous cells from her cervix. At the time, she was working as an actress and had health insurance through the Actors' Equity Association, a union that represents actors and stage managers working in theater. Soon after, she moved back home to Los Angeles, took a break from acting, and lost her coverage. When she looked into buying a policy, insurers quoted monthly premiums hundreds of dollars higher than she was able to afford, citing her recent surgery and a family history of cancer. They told her she would have to be without symptoms or treatment for at least two years before premiums would drop. So she went without.
"I just didn't go to the doctor," Gass said. "I went once for a checkup and that was it. I realized how much it would cost."
Had she been in New York, the cost of individual insurance would have been the same regardless of her history. But she still couldn't have afforded it.
Only one New York insurer has posted a plan on eHealthInsurance, at a monthly premium of $280. The plan covers hospitalization but not doctor visits. According to the New York State Insurance Department, basic HMO plans start at $320 a month. The self- employed may be able to get insurance at group rates through organizations in their field. One of the more popular comes from the Freelancers Unionpart of Working Todaywhich offers HMO coverage, including vision and dental, for $286 through Health Insurance Plan of Greater New York.
Just as race plays a factor, so does gender. By the time he reaches age 34, the average Joe earns $30,677, and could expect to pay 11 percent of that gross for the cheapest plan in New York. The average Jane, earning $21,649, would fork over 4 percent more.
If the cost of insurance is unbearable, so is the cost of not having it. Even common injuries can be financially debilitating for people still trying to get on their feet. Manhattan resident Drew Brown, uninsured and unemployed, went to the emergency room at Beth Israel for a toothache and left with a prescription and a $500 bill. Brooklynite Andrea Craig had to pay $2,000 for surgery to treat a mouth infection before she got insurance through her current job.
Some people have almost gotten used to it. "If I get sick, I go to the emergency room. I usually give them my real name. I get bills. If they are reasonable I pay them. If not if they're, like, four or five grand I ignore them," said a 35-year-old Manhattan photographer who refused to give his name. "The emergency room is the only place I go. It's the only place that's free."
High numbers of uninsured strain hospital budgets because emergency rooms can't deny care to those who can't pay, Harvard professor Blendon said. Disease outbreaks are worsened when a significant fraction of the population doesn't have insurance. "We've lucked out because we haven't had any big epidemics, but with SARS and anthrax it really struck experts that you are going to have people getting sick and not going to the doctor," Blendon said. "Canada didn't have that problem."
The only real fix is universal health care, said Ken McDonnell, and with the current political climate, he says, such a policy has "a snowball's chance in hell." Estimates of the cost range from a net savings to a new burden of trillions. A study published by the journal Health Affairs estimated that extending coverage to the uninsured would lead to extra spending on the order of $33.9 billion to $68.7 billion each year as the newly insured sought additional medical care.
Short of universal health care, most reforms still leave young adults at risk. For now, many go it alone, scrounging up care where possible and resigning themselves to the hope that lighting won't strike. After all, millions of people do it.
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