Health On The Hill: Insurance Coverage For Young Adults Moves Forward

Jackie Judd, Kaiser Family Foundation; Mary Agnes Carey, Kaiser Health News

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Today the Obama administration issued proposed regulations to implement a provision in the health care law that would allow adult children to stay on their parents’ health insurance policy until age 26. The regulation would allow children who do not live with their parents or who are not a dependent on a parent’s tax return to receive the expanded coverage. The young adult could be married and still qualify but neither their spouse or their child could receive the expanded coverage. According to the Department of Health and Human Services, the new regulation is expected to increase the cost of employer sponsored health insurance by 0.7 percent next year, or $3,380 for each dependent.


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Jackie Judd: Good day, I’m Jackie Judd with Health On The Hill.   The Obama administration today released its vision of how the new health care law will work in practice as it relates to young adults who want to stay on their parents’ health insurance plan until they reach the age of 26.  Here to explain what the draft regulations look like is Mary Agnes Carey, Senior Correspondent for Kaiser Health News.  Welcome, Mary Agnes.

Mary Agnes Carey: Thanks for having me.

JJ: How broad a reach will this regulation have?

MAC: I think it’s fairly broad.  For example, the young adult in question doesn’t have to live with his/her parents; they don’t have to be a dependent on a tax return; they don’t have to still be a student; they can be married.  Their spouse and children won’t qualify, but it seems to me that the administration has really cast a wide net to include as many young adults in this provision as possible.

JJ: Was it a surprise?  Did people expect this to be more narrowly cast?

MAC: I think because of its political popularity, and so many people on both sides of the aisle have had this experience with their own children I think it was certainly within the realm of possibility and expectation that they would cast as broad as a scope as they could on this provision.

JJ: What about the costs?  What do we now know about the projected expenses?

MAC: If you were in employer-sponsored insurance, the estimate from the Department of Health and Human Services is that your premiums would increase by just under one percent, by 0-point-seven percent next year. This benefit would cost [an average of] almost $3500 for each dependent. If you’re in the non-group (individual) market, the cost is a little under $2400 in 2011.

JJ: And do the insurance companies have to offer the same benefits package to a dependent as they do to others on the plan?

MAC: Right. You can’t discriminate. You couldn’t offer fewer benefits and you couldn’t charge more. But the thing to remember here is if an insurer did not offer dependent coverage in the first place, they don’t have to expand it to someone up to age 26. But if they have provided dependent coverage, they have to include this extension to age 26.

JJ: And, in terms of hard numbers, how many people do you think this will affect?

MAC: The estimate is about 1.2 million young adults will sign up for this coverage.

JJ: And this is a group that, disproportionate to its share of the population, goes without coverage.

MAC: Exactly. A lot of them don’t have coverage, they don’t have access. They have one of the highest rates of uninsurance and lack of access to coverage. It’s kind of an interesting marriage of political reasons and policy reasons for this particular provision.

JJ: As I mentioned earlier, these are draft regulations, they have to go through the process of public comment. So when will they be in the books?

MAC: That will probably depend on what people have to say and what reshaping may need to be done before they come up with that final release.

JJ: But some insurance companies are already on the fast track.

MAC: That’s right. Something like 65 insurers have said they’re not going to wait until September to implement this. Again, in the health law, that was signed into law in March, insurers have 6 months to implement this. They’ve stepped up to the plate and said they want to move earlier. Another key factor here is: When will employers move? They’ve been a little hesitant to do this. We found out today that United Technologies, a large employer based in Connecticut, has said they will step up to the plate and start insuring kids – continuing coverage, that is – perhaps other employers will follow that lead.

JJ: Okay, thank you so much, Mary Agnes Carey, Kaiser Health News. I’m Jackie Judd.