Adult children covered by parents' plans
Health coverage boon for young adults
By Ray Long and Monique Garcia
Chicago Tribune
August 19, 2008
Young adults could stay on their parents’ health insurance until they turn 26 under a new law pushed by Gov. Rod Blagojevich and approved Tuesday by the Illinois Senate.
The estimated 300,000 twentysomethings who are eligible wouldn’t have to live at home — or even in Illinois. And if they’re in the military, they could remain covered by mom and dad until they turn 30. They must stay single, however.
http://www.chicagotribune.com/news/nationworld/chi-legis-insurance-20aug20,0,6922973.story
Comment:
By Don McCanne, MD
For those who contend that comprehensive reform is not politically feasible and that reform must occur in incremental steps, this is precisely the type of legislation that they support. Young adults frequently fall through the cracks in health insurance coverage, having one of the highest rates of uninsurance. This legislation provides them with another option for health insurance and, theoretically, should reduce the total numbers of uninsured.
Should we celebrate this success of the incrementalists? Maybe, but before we do we should attempt to understand some of the other policy implications.
- Young adults with conditions such as diabetes, hypertension or HIV infection need coverage and would more likely continue in their parents’ plans - a classic example of adverse selection. Whether individual or employer-sponsored plans, allowing more high-cost adults to opt into the insurance pools will inevitably cause an increase in premiums. At a time when affordability of coverage already has become a problem, higher premiums will cause more to drop coverage.
- In small groups, adding one individual with significant chronic disease can cause premiums to skyrocket, making the plan unaffordable for the entire group.
- Even if initially in good health, young adults can develop chronic conditions while covered by their parents’ plans, which might make them uninsurable when they are no longer eligible for those plans. They would be disqualified for the low-cost plans designed for the young invincibles.
- Keeping an adult child on the plan can cause the premium to be set at a family rate rather than at the much less expensive rates for individuals or couples. A policy that expands the window of eligibility is of little value if you can’t pay for it.
- This legislation requires that the adult child remain single. Basing eligibility for insurance coverage simply on marital status can have perverse policy implications, possibly impacting the very foundation of the family.
- The primary reason that so many young adults are uninsured is because they have difficulty spending a large amount of money on health coverage when they need the money for other purposes, and it is quite unlikely that they would need much health care anyway. They would rather take their chances. Of course, as free riders, if they should ever develop major problems, they would shift their costs of care to the rest of us.
The benefits of this legislation are greater than the deficiencies, but it is such a tiny baby step, and a flawed one at that, that it cannot begin to compensate for the persistent deterioration in coverage that continues to plague us.
No celebrations today - not until we have comprehensive reform that automatically and permanently provides equitably-funded comprehensive coverage for everyone.