More young adults joining parents’ health plansHundreds of thousands of young adults are taking advantage of a 2010 health care law provision allowing adults to remain on their parents’ health plans until they turn 26. Blue Cross Blue Shield officials in North Dakota and Minnesota say they have noticed an increase in those being added to their parents’ coverage since the passage of the health care reform legislation last year.
By: Phil Galewitz, Kaiser Health News / MCT
WASHINGTON — Hundreds of thousands of young adults are taking advantage of a 2010 health care law provision allowing adults to remain on their parents’ health plans until they turn 26.
So far the pace of new people being added to their parents’ plans appears to be faster than the government expected. The provision allows children to be on their parents insurance until the end of the month when they turn 26 years old even if they no longer live with their parents, aren’t dependents on parents’ tax returns or no longer are students.
WellPoint, the nation’s largest publicly traded health insurer, with 34 million customers, said the provision on dependents was responsible for adding 280,000 members. That was about one-third of its total enrollment growth in the first three months of this year.
Other large insurers said they’d also added tens of thousands of young adults.
Aetna, for example, added fewer than 100,000; Kaiser Permanente, about 90,000; Highmark Inc., about 72,000; Health Care Service Corp., about 82,000; Blue Shield of California, about 22,000; and United Healthcare, about 13,000.
Blue Cross Blue Shield officials in North Dakota and Minnesota say they have noticed an increase in those being added to their parents’ coverage since the passage of the health care reform legislation last year. But officials were not immediately able to provide numbers to quantify the increase.
Mark Lyman, a spokesman for Blue Cross of Blue Shield of North Dakota — the state’s largest insurance carrier — says more young adults have joined their parents’ plans than expected.
Blue Cross Blue Shield of North Dakota chose to allow parents to add adult children last June, three months before the provision went into effect.
“Members wanted this,” Lyman said, adding that it was one of the first things the company’s members asked about after the health reform act passed last year. “That’s why we made it available early.”
The increase in Minnesota has been mitigated a bit because state law already allowed children to stay on their parents’ plans until age 25, so the federal legislation only added an extra year of eligibility.
“We have noticed an increase,” said Pam Lux, a spokeswoman with Blue Cross Blue Shield of Minnesota. “But we haven’t calculated that as a percentage.”
The dependent coverage provision went into effect last Sept. 23. However, health plans didn’t have to adopt the change until the start of the subsequent plan year, which for many companies was January. Dozens of insurers adopted the change earlier, soon after President Barack Obama signed the health overhaul law in March 2010.
Until 2014, health plans that existed before the new law was enacted don’t have to provide dependent coverage if the adult children’s employers offer any type of health coverage. The exception doesn’t apply to new plans.
The federal government added 280,000 people to its insurance rolls because of the dependent coverage, a spokeswoman for the Office of Personnel Management said.
Before the federal law was passed, many insurers dropped coverage of enrollees’ children at age 18 or 21, or when the children graduated from college. More than half the states required coverage to continue until at least age 25, but those laws often included restrictions.
The Health and Human Services Department estimated that about 1.2 million young adults would sign up for coverage in 2011. The early numbers from insurers show that it could be much more, said Aaron Smith, the executive director of the Young Invincibles, a Washington-based nonprofit group that advocates for young adults.
Insurers described the growth in young-adult enrollment as the industry began reporting first-quarter earnings that showed better-than-expected profits.
Carl McDonald, an analyst for Citigroup, said the higher profits weren’t related to the new young-adult enrollees. That’s because, he said, most of the increase in young people’s enrollment has occurred among self-insured employers; in those firms, insurers act as administrators and don’t assume financial risk.
McDonald attributed most of insurers’ profit increases this year to their customers using fewer health services, especially hospital care.
According to federal estimates, adding young adult coverage is likely to increase average family premiums by about 1 percent.
People in their 20s have the highest uninsured rate of any age group, about 30 percent, federal data show. Two factors are largely behind this: Young adults are most likely to work for employers that don’t provide coverage, and young adults don’t understand the need for health insurance.
Herald staff writer Ryan Schuster contributed to this report. Kaiser Health News is an independent news service of the non-profit Kaiser Family Foundation and is not affiliated with Kaiser Permanente. Distributed by McClatchy-Tribune Information Services.