Happily Uninsured

None of us have crystal balls to warn us of impending diseases or injuries, but we do know that all of us, no matter what our general health history may be, will need to visit the doctor at some point in time, perhaps for something major which entails not only painful treatments but also prohibitive costs.

Which is why it's especially surprising that young people are increasingly less inclined to enroll in health insurance programs. According to a recent report from the Census Bureau, nearly one-third of Americans between the ages of 18 and 34 are uninsured, many of them voluntarily. The number of uninsured aged 45 to 64 runs to less than half of that at 14%.

Most young people enjoy good health, but recent indicators from studies commissioned by the health industry imply that unhealthy lifestyles from an early age may be changing all that for the next generation. Obesity is a full-blown epidemic, and major ailments like heart disease and breast cancer seem to be occurring in younger populations. Puberty is also occurring in children at astonishingly early ages (especially among young girls), which has brought with it a new set of health concerns.

Conventional wisdom frequently asserts that persuading more healthy young adults to sign up for insurance would prove to be mutually beneficial, mostly because they are far less likely to make big claims. But recruiting efforts have yielded few results thus far, despite the fact that many insurance companies are advertising low monthly premiums designed specifically for young professionals and students in their 20s and early 30s. The main pitfall of this approach is that the premiums are attached to high deductibles (the amount the subscriber pays before insurance covers the balance), which are driving away potential subscribers.

This, of course, pushes companies to search for more effective marketing methods. Precedent Insurance, a subsidiary of the American Community Mutual Insurance Company, recently implemented a new program known as Coverage on Demand. The program was rolled out exclusively for Texas citizens, who are the most likely to be uninsured of all state populations in the country.

The benefits of the plan include low premiums and deductibles, limited benefits, and a specialized "activation fee" enabling the subscriber to make additional payments to increase benefits if more coverage is required. The caveat? There are four levels of coverage, and a minimum of $9,000 in activation fees must be paid before the top level of coverage can be offered. If this is achieved, however, the company provides up to $5 million in coverage.

Activation fees can be quite considerable, but proponents of the program argue that paying the fee is better than having to file for bankruptcy. Precedent CEO Mike Grandstaff asserts that the program works best for those who generally enjoy good health. If you will require coverage beyond what is offered at the first level, the plan will likely not prove to be a good investment.

Another pitfall of the plan is that it does not cover some basic healthcare needs, including those associated with a normal pregnancy. Undoubtedly this is to dissuade women from becoming pregnant shortly after signing up, but the bigger moral and ethical implications of such coverage may complicate the already delicate — and now increasingly unpopular — process.