As the U.S. Senate takes up the proposed American Health Care Act (AHCA), a three-state study provides evidence that eliminating the individual mandate could jeopardize young adults’ health care coverage — even with laws allowing people under 26 to be covered under their parents’ plan.
Researchers led by Lauren Wisk, PhD, of the Division of Adolescent and Young Adult Medicine at Boston Children’s Hospital, analyzed insurance data from 131,542 adolescents and young adults whose family was covered by Harvard Pilgrim Health Care between January 2000 and December 2012.
“With an individual mandate, many more young adults used the dependent coverage provision, and people who were previously dropped from their parents’ plan were more likely to get back on,” Wisk reports.
The individual mandate: A tale of three states
Her study, published in the journal Health Services Research, spanned three states: Massachusetts, Maine and New Hampshire. In 2007, all three states introduced a Dependent Coverage Expansion, allowing young adults up to age 26 to be covered under their parents’ health insurance. The same year, Massachusetts introduced an individual mandate, requiring everyone to buy health insurance. Maine and New Hampshire did not.
This allowed a natural comparison. The state laws predated Obamacare, which introduced the Dependent Coverage Expansion nationally in 2010 and the individual mandate in 2014.
Wisk and colleagues found that having an individual mandate boosted the effect of the Dependent Coverage Expansion. Under the mandate, young adults in Massachusetts:
- were 23 percent more likely to keep their dependent coverage than their counterparts in Maine or New Hampshire
- kept their dependent coverage for longer periods of time
- were 33 percent more likely to regain dependent coverage after going off their parents’ plan.
Threats to dependent coverage
The current AHCA (H.R. 1628) retains the dependent coverage provision, and it would seem to protect young adults. However, Wisk warns that various other provisions in the AHCA could undercut that popular provision.
Without an individual mandate, more young adults and their families may choose to go without dependent coverage even when it’s needed, she says. She notes that the AHCA would limit the tax credits available to families and provide significantly less income-based assistance. This could make it too expensive for some families to keep a young adult child covered as a dependent.
While the current version of the AHCA retains coverage of pre-existing conditions, Wisk notes that young adults who lose or drop their insurance could be charged 30 percent higher premiums for one year after resuming coverage. Such lapses in insurance are common for young adults, who may leave dependent coverage as they enter college or get entry-level jobs, but then find their parents’ policies offer better coverage.
“At Boston Children’s we see many adolescents and young adults with chronic conditions who could lose access to their doctors under the AHCA when they change plans, or find that the AHCA changes make it too expensive to keep seeing their doctors,” says Wisk. “Our study suggests that the individual mandate encourages young adults to have better, continuous access to the care they need. The AHCA could change that.”
Alison Galbraith, MD, MPH, of Boston Children’s Hospital, Harvard Medical School and the Harvard Pilgrim Health Care Institute was senior author on the study. Coauthors were Jonathan Finkelstein, MD, MPH, Sara Toomey, MD, MPH, Gregory Sawicki, MD, MPH, and Mark Schuster, MD, PhD, all of Boston Children’s.
The study was funded by the Agency for Healthcare Research and Quality, the Centers for Medicare & Medicaid Services, the National Institute of Child Health and Human Development and the Thomas O. Pyle Fellowship in the Department of Population Medicine.