Each year the number of uninsured individuals in the United States continues to grow. This unfortunate occurrence creates negative consequences for those who are uninsured, but also for those who are covered by health insurance plans. Through cost-shifting practices, hospitals and other healthcare organizations are increasing the cost of other healthcare services to help subsidize the care they must provide for those who cannot pay for that care. There have been attempts to solve this problem, but a successful solution has not been implemented. Rather than attempt to study the entire uninsured population, this study seeks to determine precisely why young adults between the ages of 18 and 24 are the largest segment of our population that does not purchase health insurance. Socioeconomic status, perceived health, cost, gender, race, and perceived need are all examined in order to determine what type of relationship each one has with a young adult's decision to purchase private health insurance. Structural equation modeling is used to analyze data obtained from the 2005 Medical Expenditure Panel Survey. This study is unique because is includes latent variables and examines a variable that is not often included in health insurance studies that exist in the literature, perceived need. The results of the study indicate that being uninsured is largely a matter of having a higher socioeconomic status and being a non-minority. Perceived health, cost, gender, and perceived need were not shown to have a significant relationship with the dependent variable, private health insurance coverage.