NEW YORK (MainStreet) -- While critics may claim the new Affordable Care Act is a declaration of dependence, rather than a declaration of independence for Americans, one demographic is very happy with health care reform -- young Americans.
A study from the University of Indiana and the National Bureau of Economic Research shows that young adults, identified as aged 19 to 25, are rushing to take advantage of health care reform that allows them to be covered by their parent’s health insurance.
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Government data shows that 3.1 million young Americans have been added to health care insurance rolls since September 2010 -- when the stipulation that all private health insurance policies accommodate the coverage of “children” up to 26-years-of-age became law. That's a 75% increase, according to the U.S. Department of Health and Human Services.
The White House says that young adults are particularly liable to have no health insurance, and need all the help they can get.
- Young adults have the highest rate of uninsured of any age group. About 30% of young adults are uninsured, representing more than one in five of the uninsured. This rate is higher than any other age group, and is three times higher than the uninsured rate among children.
- Young adults have the lowest rate of access to employer-based insurance. As young adults transition into the job market, they often have entry-level jobs, part-time jobs, or jobs in small businesses, and other employment that typically comes without employer-sponsored health insurance. The uninsured rate among employed young adults is one-third higher than older employed adults.
- Young adults’ health and finances are at risk. Contrary to the myth that young people don’t need health insurance, one in six young adults has a chronic illness like cancer, diabetes or asthma. Nearly half of uninsured young adults report problems paying medical bills.
The adult child provision of the ACA is one of the few already in effect, and is seeing steady expansion, the study shows.
"There's been a great deal of debate regarding expansion of public spending to cover the uninsured," notes Kosali Simon, a public and environmental affairs professor at Indiana, and a co-author of the study. "In the case of young adult coverage, however, the policy has had a significant impact through an expansion of private coverage. Although prior reports have noted that young adults are more likely to be insured now than before the law, our study is the first to specifically follow dependent coverage through parental employer policies."
Simon, along with co-author Yaa Akosa Antwi, assistant professor of economics at Indiana University-Purdue University, found that the young adult demographic wasn't equally taking advantage of the new health coverage option:
- Young men were twice as likely as young women to become insured after the law took effect.
- Minorities were less likely than other young adults to add coverage under their parents' plans, consistent with evidence of lower availability of employer health insurance among minority parents.
- Young adults who were single were more likely to be added to parental coverage than those who were married, even though the law applies regardless of marital status.
In addition, many health care providers, despite not being required to by law, allowed young adults under their parent’s health care umbrella. The added burden of paying for their kids’ health coverage is hardly insurmountable: the government says that adding young adult coverage adds, on average, 1% to health care premiums.
"We find that the willingness of some health insurers to allow young adults to stay on their parents' insurance plans before they were legally obligated to do so led to a noticeable increase in parental coverage," Akosa Antwi said in a statement.
A key culprit in forcing more young Americans onto their parents’ health care plans was the Great Recession. With the unemployment rate for Americans aged 20-24 hovering around 14%-16%, young consumers increasingly can’t afford heath care coverage.
Expect the parental coverage of young adults trend to continue as long as unemployment remains a vexing issue.