23 and uninsured

Elaine Farrell deals with insurance forms and rules every day at the dental office where she works. But she recently found out that she’s as much a novice as anyone else when it comes to general health insurance. ¶ Her oldest daughter, Kristen, turned 23 last week and was booted off her parents’ medical plan. The insurance company had mailed a notice about the impending change in status only a month earlier, sending Mom into panic mode. ¶ “I never had to do anything like this before,” Farrell said. “There were so many things to think about.” ¶ Farrell’s daughter, a full-time Cal State Long Beach student who had a severe case of asthma as a child, uses inhalers and takes medication. ¶ That would be enough for many companies to deny coverage altogether, especially in California, where state law won’t allow insurers to issue policies that exclude most preexisting conditions. The Long Beach residents got their share of rejection letters until they finally found a bare-bones policy -- no dental, no vision, high co-payments, three doctor visits annually -- for $126 a month.

Who insurers want is someone like Antonio Bardales of Long Beach, a healthy, prescription-free 24-year-old college graduate. Last June, before he fell off his parents’ plan, his father, Oscar, found comprehensive short-term medical insurance -- dental, vision, low co-pays -- for him at $92 a month.

“In the past year, he maybe went in once to see a doctor, and that was just for a checkup,” the elder Bardales said, and that made his task easier than Farrell’s.

Dilemmas abound for parents of so-called young invincibles, Americans aged 19 to 29, and for the invincibles themselves. About 40% of them go without health insurance, some because they don’t care or think they don’t need it, others because they can’t afford it or can’t get it.

Regardless of the reason, they tempt fate.

David Choi, 21, of Arcadia was snowboarding in Big Bear while on winter break from Northwestern University a few months ago when a fellow snowboarder plowed into him. Choi didn’t have insurance at the time and paid the full cost of emergency room treatment and 10 stitches -- $1,500.

“After the accident, I figured it was worth it to get some kind of coverage,” he said.

An untapped market

For the last few years, underwriters have been targeting young invincibles with more health plans. Some plans have been criticized for benefit caps of $10,000 or less and for not including prescription, dental or vision coverage. But with the general insurance market becoming saturated, young adults may be seeing more and better plans coming.

“It’s the last untapped, financially viable market,” said analyst William Georges at JPMorgan Chase & Co.

Still, insurers don’t necessarily make coverage easy to obtain. Here are a few things to consider:

* An individual plan is tougher to get than an employer’s group plan because carriers underwrite each policy and exclude people who pose too much of a risk. But the individual plan is cheaper because group plans have to accept everyone, increasing the risks for insurers.

* Many college alumni associations also offer health insurance, usually through two insurance brokers, American Insurance Administrators Inc. and Marsh Affinity Group Services. Marsh offers graduates of about 30 universities in California only a key group feature on their individual plans -- guaranteed acceptance if they apply within 90 days of graduation.

* It’s not just your gender, age or health, but your ZIP Code that can save you money -- or cost you. One of Blue Shield of California’s Essential Plans charges $103 a month for a resident of Inyo or Kern counties and $123 for a resident of Los Angeles. The reason? Competition and the cost of services vary from region to region.

* It’s difficult to compare plans because there are so many variables. Deductibles and co-pays differ, reflecting various levels of premiums, and the percentage paid for in-network and out-of-network doctors and hospitals vary. Such websites as CalHealth.net, eHealthInsurance.com and WebMD.com can help make sense of the offerings.

* For those with incomes below about $51,000, Medi-Cal, Kaiser Permanente and other groups offer plans at reduced premiums. The Foundation for Health Coverage Education in San Francisco focuses on such coverage on its website, CoverageForAll.org.

One more thing -- you have to decide between a managed plan or a fee-for-service plan.

Health maintenance organizations such as Kaiser require you to use their facilities and doctors, while preferred provider organizations let you choose your own doctor from a list of private physicians who have agreed to accept certain payment levels; these plans will pay a lesser percentage for doctors outside their networks.

The lines are often blurred with HMOs sometimes dressed like PPOs. Aetna Inc. has offered HMO plans that have PPO characteristics, and Kaiser is looking to do something similar.

WebMD suggests forgetting about the label and looking instead at the details so you understand your options and how they affect service, quality and price. An HMO may seem attractive, but if the nearest facilities are a long drive away, it might not be your best choice.

The California Office of the Patient Advocate issues annual report cards on the quality of HMO, PPO and other plans. The reports are available on its website, opa.ca.gov.

In short, parents who are searching for health insurance for their young adult children would be doing about the same thing if they were in need of a plan themselves.

Parents also can go directly to the state’s five largest underwriters -- Blue Shield, Anthem Blue Cross, Health Net of California, PacifiCare Health Systems and Kaiser Permanente -- or smaller ones such as Aetna.

UCLA researchers are trying to detect whether the increased marketing to young adults will make a difference in lowering the 40% uninsured rate cited in a 2005 survey, the latest available from the school’s Center for Health Policy Research.

“Employer-based insurance is the driver, and we expect to see a dip in that,” said Shana Lavarreda, a senior research associate. “So we will not be surprised to see a rise in the uninsured” when the 2007 report is published this year.

Blue Cross, a subsidiary of WellPoint Health Networks Inc., has been aggressive in developing and marketing plans to young adults, starting a few years ago with its Tonik plan aimed at those who are healthy but not working or working without benefits. Blue Shield also has been active, especially in the alumni market, where it underwrites much of broker American Insurance’s offerings, including the short-term GradMed program.

School-affiliated plans

Alumni groups offer plans to graduates of any age. But each school is different and has different rules. In some, you must graduate; in others, you have to complete at least one term. Many don’t require you to join the alumni association, but some do.

There is no single program for all Cal State or UC alumni groups. Even Cal Poly Pomona’s alumni group has different plans, run through American Insurance, than Cal Poly San Luis Obispo’s association, run through Marsh Affinity.

American Insurance, which serves about 320 university alumni groups, has found that its GradMed program is popular in tough economic times.

“When they find it harder to get a job, they need some health insurance to cover them while they’re looking,” said Jeff Roedel, American’s chief operating officer. “If they’re walking right into a job, they rarely need it.”

But if they’re walking into a job with a small company, those with fewer than 200 employees, they may need to find their own long-term comprehensive plan.

That’s because small companies are increasingly dropping health insurance benefits, leaving workers to fend for themselves. Seven years ago, 65% of them offered health plans; that fell to 59% last year, according to the latest Kaiser Foundation Employer Health Benefits Survey.

And even if companies offer the benefit, young adults might be able to get it cheaper on their own.

That’s what Kristen Farrell faces when she graduates next year with a degree in interior design. She plans to work for a small company and eventually to open her own shop. That, along with her medical history, made her need to find coverage paramount.

When Farrell learned she would be tossed off her parents’ plan, she thought she could just get another one quickly. “It was really weird to learn that it was so hard to get,” she said.

Her mother, Elaine, went first to websites and began applying for insurance, only to get rejections or worse -- to find she didn’t even understand what the carriers wanted in their online forms.

“They want you to do everything on the Internet, but when you have a question, you want to talk to someone,” Elaine Farrell said. “I could never get ahold of anyone.”

She even contacted an insurance broker to help her search for plans. But in the end, it was a TV advertisement for a no-frills Blue Cross plan called SmartSense that caught her attention. She applied, not expecting much, and her daughter was approved.

The low-cost SmartSense plan provides members with basic protection, which does not include maternity benefits, a typical exclusion allowed by the state, or any dental or vision coverage. It offers a variety of deductibles starting at $500 and can provide protection against expensive and unexpected medical bills, such as injuries from a car accident.

Because of Kristen’s asthma, her premium is higher and benefits less than they would be for someone without the condition. Still, that beats the more than $500 a month she would have paid had she extended coverage under her parents’ plan for up to three years under COBRA, the federal law that requires employers to offer a continuation of the employee plan as long as the member pays the entire premium.

Antonio Bardales, on the other hand, picked up short-term full coverage, extended three times now. His father, Oscar, is considering a long-term comprehensive plan that they expect will be even cheaper.

Bardales, who is working his way into the movie industry, may need the new coverage. He expects to start at a small company that probably won’t offer employees a group health plan.

Oscar Bardales had an easy time getting coverage for his son. He simply checked the Internet for better deals, then returned to Health Net, the company that insures the family.

“Health Net was convenient, close by, and we’re familiar with it,” he said.

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james.granelli@latimes.com

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Help on the Internet

Websites for health insurance education and research

* California Office of the Patient Advocate, opa.ca.gov

* Foundation for Health Coverage Education, coverageforall.org

Websites for education and comparing coverage

* CaliforniaHealthPlans.com

* eHealthInsurance.com

* eInsurance.com

* Insurance.com

* CalHealth.net

* WebMD.com

Source: Times research