Bill would extend coverage under parents' policies

Melissa Matthews, 26, is a full-time student at the Medical University of South Carolina. The insurance industry deemed her too old to be included in her parents' health care coverage.

COLUMBIA — As a medical student, Melissa Matthews spends about 80 hours a week treating people, some who are homeless or too poor to pay for care.

But when Matthews, 26, a third-year student at the Medical University of South Carolina, suddenly lost hearing in her right ear about four months ago, she was left with a $5,000 bill to add to her already mountainous $200,000 in student debt — and a steady ringing.

Like 40 percent of young adults in South Carolina, Matthews lost inclusion in her parents' health care coverage when the insurance industry deemed that she was too old.

The state is now joining more than 30 others that have tried to find ways to increase age limits and extend coverage to their uninsured, although industry insiders warn that it could end up costing many families higher premium costs.

"I knew I couldn't afford to pay the emergency room fee, so I waited until the morning," Matthews said. "I went to bed and I woke up and my hearing was gone for good. I will have ringing until I can afford to get treatment for it."

The bill, which is in an early stage of the legislative process, would allow unmarried young adults to stay on their parents' insurance until they're 25, or 30 if they're full-time students. As it is now, young adults are cut off at 19, and 22 for students.

Military personnel could qualify to be covered for up to 24 months or as long as 36 months under their parents' insurance, up to age 33, after discharge from active duty, depending on the length of time they served in active duty. The coverage would only apply to former servicemen and women who are not married.

But if the bill is to have any life, legislators likely will have to pull back on the original proposal as drafted by Sen. Joel Lourie, D-Columbia.

"It strikes me as very unfair that a high school graduate who wants to take off a year or two before they go to college is immediately dropped off their parents' policy," Lourie said.

Lynn Bailey, a Columbia-based health care consultant and economist, said many parents are shocked to learn that their children no longer have health insurance when they stop being students because their studies are interrupted by a sudden illness, accident or pregnancy.

She estimates that the legislation could catch between 100,000 and 200,000 young uninsured South Carolina adults.

Nevertheless, the bill is unlikely to change the overall number of uninsured in South Carolina, Bailey said. While large employers likely won't be affected because they usually are self-insured, smaller companies will face higher health care costs because they often can't provide large enough pools of people to demand better premium rates from insurance companies.

While the bill is an "excellent idea," many people will be priced out of the market as the increased cost to employers ripples through the system, Bailey said. That process could be as quick as 18 months, she said.

Larry Marchant Jr., executive director of the South Carolina Alliance of Health Plans, said the Senate must be careful to study the unintended consequences. He does believe, though, that there is room for some middle ground, especially when it comes to military members.

Marchant said a better approach would be for the Legislature to focus its energy on increasing the cigarette tax and using the revenue as tax credits for low-income workers to purchase health insurance, a proposal that would help some of the very same young adults.

"We don't need to be encouraging adults to stay on their mom and dad's insurance until they are 30 years old," Marchant said.

That proposal and others are being considered by a Senate panel charged with studying whether to increase the state's 7-cent per pack cigarette tax, which is the lowest in the nation.

On Lourie's bill, the Senate Banking and Insurance subcommittee postponed a vote until the insurers provide potential cost estimates. Lourie said he has not been able to find evidence to back up some of the claims so far.

Matthews said she can see how the legislation could have a very real and meaningful impact. She lost her father's insurance coverage — through his employer in Massachusetts — when she turned 25. Since then she's used her student loans to buy a $1,000 insurance plan that, as it turns out, doesn't cover hearing loss.

"That is disaster for me to lose hearing in my right ear, but it apparently wasn't a disaster to my insurance company," Matthews said.

By the numbers

The Health Care Accessibility for Young Americans Act, a bill pending in the state Senate, would increase age limits on family insurance plans.

19 - The age at which young adults in South Carolina lose their family health care coverage, unless they are full-time students, who are allowed to stay on their parents' plans until they turn 22.

40 - The percentage of 18- to 25-year-olds who have no health insurance.

25 - The new age cap, proposed in bill 1010, for young adults on their parents' insurance. They could stay on until they are 30 if they're full-time students.

33 - The age cap for former military personnel who have seen at least six months of active duty. However, if they get married, like all young adults in the new groups, they lose the insurance option.

21 - Number of states that have recently enacted laws extending coverage to a combination of young adults; 12 states are also considering expanding coverage.

Source: Senate documents and subcommittee testimony