The New Health Dialogue

We know that young adults are the group most likely to go uninsured. A staggering 29.3 percent of Americans aged 19-29 lacked health insurance in 2008. There are several reasons. We think we’ll never get sick. It’s too expensive. Maybe our employers don’t offer health benefits. 

As of late 2009, 38 states had taken steps to expand dependent coverage to young adults in their twenties and beyond. A new policy brief released by State Health Access Reform Evaluation, a national program of the Robert Wood Johnson Foundation, notes some of the individual state experiences.

Insurers typically drop children from their parents’ insurance plans once they turn 18 (or 23 for full-time students) as they are no longer deemed “eligible dependents” according to health insurers. There is currently no federal statute that defines “dependent” in regards to insurance coverage (although the national health reform legislation being considered in Congress would allow all young adults to stay on their parents’ plans until they’re 26 or 27).

Those 38 states established specific, and widely varying, adult dependent coverage policies. Common qualifiers included: student status, age, marital status, dependent’s own parental status, state residency, financial dependence upon or resident with parents, continuous or creditable coverage, inclusion of particular insurance markets, and specifications about premium calculations and about who bears the cost burden of new dependent enrollees. The mean increase in age limits for students was 3.5 years, 5.7 for non-students. Texas and Iowa went so far as establishing no age limit for young adults, so long as they are students.

The goal of expanding the scope of dependent coverage was to lower the rate of uninsurance among young adults. Unfortunately, preliminary findings (based on the Current Population Survey data through 2008) indicate that while there may have been a small increase in the coverage of young adults as dependents, this increase was actually countered by a decline in other sources of coverage; there was no net effect on total insurance coverage. Note that Utah (implemented new dependent coverage policies before study period began) and Massachusetts (has an individual mandate) were excluded from the study. The impact of a federal adult dependent coverage expansion law is unclear as federal legislation would mandate that almost all young adults have health insurance and would offer premium subsidies to ensure affordability.