College Connect Spring 2019: College Students and Health Insurance

By Jennifer Williams

As college students graduate and enter the job market, they face a critical question: How will they pay for health insurance?

The Affordable Care Act (ACA) plays a significant role in young adults’ coverage decisions, as it allows them to remain on their parents’ insurance until age 26. This is an advantage for many students who are worried about affording health care on their own as they start their careers and begin paying off student loans.

When University of Georgia senior Julia Richurdulli was offered a position with Deloitte in Atlanta, health insurance was not a primary factor in her decision to accept the job.

“I know my mom has pretty decent health care coverage,” said Richurdulli. “And also, I have student loans. If I can avoid paying my own health care costs, that’s something I definitely want to do.”

However, senior Megan Gaffney will not stay on her parents’ plan after graduation. She intends to seek coverage through a future employer instead.

“My parents made a deal with me that they’ll pay for my education, a bed and a car, and I’ll graduate debt free,” commented Gaffney. “But I have to be off their bills and insurance within six months of graduation.”

The cost of insurance Gaffney will face is not insignificant. According to the ADP Research Institute, individuals who earn $15,000 to $20,000 spend 9.5 percent of their income on health insurance premiums, while those who make $45,000 to $50,000 spend 5.8 percent of their income on premiums.

Recent modifications to the ACA is expected to change how both insured and uninsured young adults approach health insurance.

The ACA formerly included a Shared Responsibility Payment (also known as the individual mandate or penalty), which fined people who could afford health insurance but chose not to purchase it. The Shared Responsibility Payment required minimum essential coverage, but the mandate was repealed on Jan. 1, 2019.

According to Elizabeth Weeks, UGA School of Law’s Associate Dean for Faculty Development and the J. Alton Hosch Professor of Law, the recent changes to the ACA will impact young adults’ health insurance options and decisions.

“We expect that catastrophic and other plans with less comprehensive coverage, lacking many of the other consumer protections in the ACA, will be more widely available,” said Weeks. “That may be a good thing for young adults, allowing them to purchase leaner and more tailored plans for lower cost, but the coverage provided by those plans may be less meaningful, should a serious injury or illness arise.”

Even prior to the repeal of the individual mandate, data from the U.S. Census Bureau indicated approximately 14 percent of young adults aged 21-23 were uninsured in 2016.

CNN Money reported 57 percent of “young millennials” in 2011 who were eligible for health insurance through their employer took it, but in 2015, only 44 percent of young millennials enrolled in their employer’s health coverage.

Weeks said most of her students use their parents’ insurance while in law school, but overall she expects to see more uninsured young people given the changes in the law.

“Without the mandate, I also expect that more young adults will opt out of coverage altogether, again exposing themselves to medical and financial risk,” she said.

Jennifer Williams is a journalism student at the University of Georgia.

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