Minn. Insurers Seek Ways to Keep Recent Grads Covered

June 5, 2007

More than 98,200 Minnesotans between the ages of 18 and 24 don’t have health insurance, partly because of a state law that says a child can be covered by parents’ insurance only until age 18, or until age 25 if they are a full-time student.

That means many college grads fall off their parents’ policies after they earn a diploma. Starting Jan. 1, a new law will allow young people who are dependents to stay on their parents’ insurance plans until they turn 25. But that doesn’t change the situation for this year’s graduates.

“In the hierarchy of things you spend money on at (age 22), insurance does not rise to the top,” said Scott Leitz, assistant commissioner in the Minnesota Department of Health. “They’re thinking of finding a job, making rent payments. And when you enter the job market for the first time, often those jobs do not offer benefits.”

The University of Minnesota requires students to purchase a school health policy if they don’t have private insurance. The University of St. Thomas will do the same starting this fall.

The University of Minnesota allows new graduates to extend coverage until Aug. 19. The school’s Alumni Association also offers short-term medical insurance for graduates, and students received e-mails this spring reminding them that they’ll likely be dropped from their parents’ policies.

Several Minnesota insurers are working on health coverage packages for young people. Blue Cross and Blue Shield of Minnesota announced its Simply Blue coverage for young adults in January, and 1,500 policies have been sold, mostly to people ages 19 to 25.

“Young adults … think they’re invincible, or they don’t think they need or can afford it,” said Joel Swanson, Blue Cross spokesman. “We did market research, and a lot of them don’t see what they’re getting for the money.”

Simply Blue allows limited emergency room and doctor visits, but doesn’t cover expensive conditions such as pregnancy. Coverage can be purchased online, an advantage with young people. Depending on the deductible and a person’s current health, premiums for those under 30 range from $76 to $105 a month.

Most of the inquiries about Simply Blue come from parents, said Brian Davis, Blue Cross’ manager of individual sales.

“Parents realize that at the end of the day, they’ll be the ones who will be paying if their child has an accident,” he said. “And they don’t want to be on the hook for $10,000.”

Last month, University of Minnesota graduate Monica Heth was riding an all-terrain vehicle when she crashed into a tree and flipped over. The 22-year-old broke her hand, and knew she’d have to pay for X-rays at the hospital herself.

“I got a catastrophic (insurance) plan in May, but this isn’t covered,” said Heth, of Minneapolis. “I’m supposed to go back for X-rays to see if it’s healing. I have enough money to pay for the first visit, but I don’t know how much this will cost.”

Will she go back?

“I guess it depends how much money I get for my graduation,” she said.

Topics Carriers Minnesota

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