Reform Will Keep More Young Adults on Parents' Policies
One of the first provisions of the federal healthcare overhaul—allowing young adults to stay on their parents' health insurance until they turn 26—is expected to make a big dent in the number of uninsured young people this year.

The change will make it easier and cheaper for thousands of 20-somethings to obtain insurance, even in states where other options have existed for several years.

Young adults like Casey Schick, 23, of Glen Rock, N.J., and Meghan Mullooley, 22, of Lyndhurst, N.J.—who have part-time, entry-level or unpaid jobs, if they have jobs at all—have the lowest rates of insurance coverage of any age group.

More than 30% of young adults nationwide are without insurance. They earn less, on average, than those who are older, and have higher rates of unemployment. They account for about one-fifth of the nation's uninsured.

By expanding coverage to young adults until age 26, "over 1 million young adults can keep or get coverage at an affordable level," Health and Human Services Secretary Kathleen Sebelius said.

The expansion is expected to increase premiums for all by less than 1%, Sebelius said.

In states that have enacted a similar law, the effect will probably be less dramatic. But in most cases, the federal law will reduce the cost to parents to insure their grown children—because they won't have to buy individual policies for them, for example—and get those kids better coverage.

"If we do have insurance, it's often not very good insurance," said Aaron Smith, 28, who co-founded Young Invincibles, an advocacy group for young adults in the reform debate. "You hear of kids going to the ER and ending up with hundreds of thousands of dollars of bills."

Smith graduated from Georgetown University Law School last month. As he heard stories of young people around the country, he found that work and life decisions were often influenced by the availability of health insurance.

Across the country, some plans force young people off their parents' plans when they turn a certain age, usually from 19 to 23. Or coverage may continue through the college years but end abruptly upon graduation. College students covered by student policies can find that their coverage runs out before their needs do; the unluckiest are those who develop cancer or another serious illness and subsequently can't get affordable coverage. Fifteen percent of people ages 18 to 34 suffer chronic illnesses such as asthma and diabetes.

The young-adult extension is one of the most popular aspects of the Affordable Care Act provisions that squeaked through Congress in March. "That's the biggest thing that people talk about" when he meets constituents around his district, Rep. Frank Pallone Jr. (D-N.J.) said at a health-reform conference recently.

The Obama administration, hoping to earn some early public support for health reform, has encouraged insurers to move up the rollout date so this year's graduates won't fall off insurance rolls.

"It's clear they want to include as many [young adults] as possible," said Joel Cantor, director of the center for state health policy at Rutgers University.

Children are eligible even if they're married or economically independent. They need not be students or live in the same state as their parents.

"We think it's good for the whole system to get more healthy people to get coverage," said Larry Altman, vice president of New Jersey's largest insurer, Horizon Blue Cross Blue Shield. "We're supportive of this."

That view is not universal, however. "What I worry about is the cost impact," said Christine Stearns, of the New Jersey Business and Industry Assn.

Employers could find ways to pass the cost to their workers. "The more the cost of family coverage grows, employers will have to look carefully at how they subsidize it," Stearns said.

Many insurance carriers have responded to the White House invitation for an early rollout, though details vary, said Ward Sanders, executive director of the New Jersey Assn. of Health Plans.

On June 1, Aetna was scheduled to begin allowing young adults to stay on their parents' coverage in the individual and small-group market, said Mohit Ghose, an Aetna vice president. Those who use Aetna as an insurance administrator also were given the opportunity to make the switch June 1, he said.

Horizon implemented it May 1 for its insured plans. "If they're on their parents' account now, they can stay on it," Altman said. "We're doing it so they don't have a gap in coverage." Other plans, for which Horizon is the administrator, can choose to wait or implement it early.

Some companies advanced the implementation date only for those who would fall out of coverage this year. But others are allowing young people who have already been dropped—and don't have other insurance—to re-enroll.

The new law requires insurance carriers to offer extended coverage on or after Sept. 23, whenever the parent's plan is renewed.