Health Reform Dependents Clause May Backfire


The provision in the health reform bill that guarantees coverage for young family members who are 26-and-under doesn’t kick in until Sept. 23. In the meantime, insurers are free to “kick” young family members off their parents' health insurance plans. It’s all about eligibility versus ineligibility right now, and only now are some insurers coming down off the fence and deciding to “voluntarily” add young family dependents before they actually have to.

Some details first. The Affordable Care Act, more commonly known as health care reform, allows for most U.S. children and young adults under the age of 26 to be covered for health insurance under their parents’ policies (providing they don’t receive health insurance from their employer).

According to White House figures, about one in three people age 19-34 actually have health insurance. Furthermore, only 53% of young adults are offered health insurance through their jobs.

Right now, young adults 18-and-over can only get on their parents’ health plan if they are full-time students and are under the age of 23.

But that doesn’t mean insurance companies have to give health care to young adults before they have to — and that isn’t until late September. In the meantime, college graduates shifting from private health care plans they got through their schools and universities aren’t guaranteed coverage once they depart their alma mater. The Obama administration, particularly the Office of Health and Human Services, has been lobbying health care issuers to “bridge” that four-month gap between college health insurance and the Affordable Care Act coverage that begins in September.

Those lobbying efforts finally look like they’re paying off. Companies like Blue Cross, Blue Shield, Humana (Stock Quote: HUM), Kaiser Permanente, WellPoint (Stock Quote: WLP) and United Health Care (Stock Quote: UNH) all will now offer early admittance to plan coverage as spelled out in the health reform legislation.

What the White House did to nudge health insurers into an early admittance territory isn’t clear — but as more and insurers go along, it will be harder for the remaining companies on the sidelines not to reach out and bridge the insurance gap for under-26-year-olds without health insurance this summer.

And the White House isn’t giving up. "We are also working hard with other insurers on similar proposals and sent a letter today offering to work with each of them to expand this opportunity even further, " Health and Human Services Secretary Karen Sebelius said in a statement April 19. "The letter follows productive discussions with insurers since the bill passed about closing the gap in coverage for college graduates or young adults whose birthday in 2010 made them ineligible to continue on their parents' plans."

Wellpoint says it will allow children under age 26 to hop on their parents’ health plans June 1. UnitedHealth has been allowing such coverage for individual policy-holders (but not employee plan participants) for a while now. Humana has pretty much the same policy as UnitedHealth — if you’re on your parents' plan now, you can remain there.

Parents wondering if their health insurer can get on their plans immediately are best advised to call their insurance company, or contact their employer’s health plan advocate to check their status. Most states have varying rules on insuring young adults; specifically on limits on how long parents can cover their children on insurance policies.

Increasingly though, it looks like the cavalry has arrived just in time — and that’s good news for parents of young adults wondering if their kids had health coverage or not.

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