This year, 1.4 million graduates are tossing their mortarboard caps into the sky and receiving bachelor's degrees. Almost immediately, many will face another rite of passage: getting dropped from their parents' health insurance.
Most group health plans cover employees' children until the age of 19 -- or often up to 23 if they are full-time students. After that, many young adults must put together their own health safety net. But with the economy weakening, and entry-level jobs that offer health coverage harder to find, some recent graduates are coming up with creative ways to protect themselves.
Phillip Ngo was removed from his father's workplace health insurance when he graduated from New York University last year. So the 22-year-old came up with an idea to get back on his parent's plan -- going back to college without ever setting foot in a classroom.
Even though he had a bachelor's degree, Mr. Ngo enrolled as an online student at his hometown City College of San Francisco, a two-year college. Two days later, he presented proof of enrollment and a class schedule to his father's insurance company, which put him back on the plan.
Young adults are the fastest-growing group of the uninsured, according to 2006 U.S. Census data. And one in three -- or 13.7 million -- Americans aged 19 to 29 lacks health insurance, according to the Commonwealth Fund.
At least 18 states have enacted laws that require insurers to allow parents to extend coverage for older dependents, often whether they are in college or not. A few other states have similar laws, but with various restrictions. Although a family's premium might go up, coverage is now available in most of these states for dependents up to age 23 or 25. In New Jersey, the upper limit is age 30.
But for young adults who don't live in any of these states, or who aren't claimed by their parents as dependents, college graduation can bring a scramble for health coverage. Some recent graduates shop online for the cheapest policy they can find, which often comes with a high deductible. Other people temporarily extend the coverage they previously had under their parents' plan through the federally mandated Cobra program, which often comes at a steep price. Some graduates go without insurance altogether and hope for the best.
Ineligible for Extension
Ryan Todd, 24, was removed from her parents' policy after graduating from DePauw University in 2006. She currently lives with her parents in California, which allows young adults to continue their health coverage after they graduate. But the state restricts this extended coverage to people who are disabled, making Ms. Todd ineligible.
Ms. Todd works as a freelance costume designer in Southern California. Later this year, she will be eligible for membership in a union that offers health coverage. Meanwhile, Ms. Todd has arranged a patchwork of temporary solutions. She occasionally text messages her symptoms for minor ailments to a doctor friend and gets his advice. She takes advantage of free services at Planned Parenthood. And she considers herself fortunate to be healthy. "I don't even make enough money to move out of my parents' house, let alone afford health insurance," Ms. Todd says.
Going without coverage isn't an option for some people. Cole Murray was diagnosed as an infant with aortic stenosis, a congenital heart defect. He has had five open-heart surgeries and two pacemakers and spent 10 days in a coma when he was 19. His medical costs in 2003 alone totaled $750,000, covered through his parents' insurance.
Mr. Murray's family lives in Indiana, and when he graduated from Columbia College in Chicago with a degree in film, he took advantage of his home state's law that allowed him to remain on his parents' policy an extra year. Now, Mr. Murray is paying $476 a month for Cobra coverage, which extends his parents' coverage until January, when he turns 25. Cobra is a federal law that provides continuation of group health coverage that otherwise might be terminated.
"Most people can spend a couple of years without health insurance, but I don't have that option," he says. Mr. Murray moved to Los Angeles last fall to pursue a career in film. If he doesn't line up a job with health coverage in the next few months, Mr. Murray says he will move back to his home town and look for any job that offers insurance.
Laura Roeder, 23, opted for a high-deductible policy after she graduated from University of Texas at Austin and started her own freelance Web design business in Chicago. She pays $60 a month for coverage through Humana Inc. But since none of her medical expenses under $5,000 are covered under the policy, she avoids routine visits to the doctor. She copes with colds and the flu by ingesting high-dosage vitamin C drinks.
"I'm going to stay self-employed," she says. "And [health insurance] is not suddenly going to become affordable."
Mr. Ngo says that after graduating from New York University with a theater degree, he "bounced around" between unpaid and low-paid internships and personal-assistant jobs in New York City. None offered health coverage. While uninsured, Mr. Ngo says he contracted a nasty flu. But fearing a big bill, he opted not to seek care. Although he got well on his own, the experience scared him.
Mr. Ngo says he got the idea to enroll in a community college in order to get back on his parent's coverage after hearing about the plan from a friend. "I never did anything for class," Mr. Ngo says. "For me, 300 bucks for a semester's health insurance was a good deal. So I thought why the hell not?"
In March, Mr. Ngo got a job as an assistant to a Broadway producer in New York. After 90 days on the job, he qualified for his employer's health insurance, for which he pays $32 a month. He withdrew from the community college, receiving incompletes for his classes.
