JHPPL: Expanding coverage for young adults

Hard copy of the February, 2012 Journal of Health Politics, Policy, and Law arrived in my mailbox. If I may say, it’s a nice issue. I’ve already blogged about two excellent Point-Counterpoint essays regarding personal belief exemptions from childhood vaccinations.

Now I want to note a nice piece by Joel Cantor and colleagues: “Expanding dependent coverage for young adults: Lessons from state initiatives.” The Patient Protection and Affordable Care Act (PPACA) allows young adults, age 19-26, to enroll as dependents on their parents’ employer-based health plans. Cantor and his colleagues examined implementation in thirty-one states, including four detailed case studies of prior experiences among states that permitted similar forms of dependent care coverage before health reform.

Coverage for young adults has already proved to be one of the most valuable provisions of health reform providing coverage. Indeed the numbers look markedly better than they did when Cantor and colleagues’ article went to press.

Expanded young adult coverage has secured coverage for perhaps two million people. It is especially valuable for young adults with preexisting conditions who would otherwise be left to the tender mercies of the individual and small-group insurance market. Ironically, this provision may have done more to help the medically uninsured than PPACA’s valuable but flawed Preexisting Condition Insurance Plans (PCIP). As Cantor and his colleagues rightly note:

Unlike most other ACA coverage reforms, expanded dependent coverage is conceptually simple, with the virtue of not requiring an extensive new bureaucracy or substantial new public funding.

Equally striking, PPACA’s expanded dependent coverage is proving more successful and more feasible than one might have expected based on prior experiences in many states that attempted similar measures. States–deploying limited fiscal capacity, responsive to employers’ financial anxieties about cost and adverse selection—imposed a variety of residency and marital-status requirements, worker premium sharing, and preexisting condition exclusions that were not present in PPACA.

States were also constrained by ERISA (Employee Retirement Income Security Act), which fundamentally limits regulation of self-insured employer health plans. Because of ERISA, “only about 44 percent of workers in private employer-based plans nationally who are potentially subject to state regulations on dependent coverage.”

Detailed case studies suggested that individual consumers were poorly-informed about dependent care options within their own states. Insurers faced little obligation to educate policyholders regarding these options. States have deployed little outreach or public education alerting consumers to these options.

It’s a commonplace to claim that the states are laboratories of democracy. So they are. State experience can be invaluable in developing new policies, understanding common pitfalls, unintended consequences, and implementation obstacles. Yet sometimes state experiences provide a poor guide to what dramatic national policy changes can really do. This was true in welfare reform, when I and others underestimated the likely impact of time-limited benefits. It is true again in ACA, this time providing more favorable results.

Canto and colleagues note one issue that deserves further thought: the population these provisions serve. Expanded dependent coverage addresses the widespread concerns held by millions of middle-class parents in good jobs with good benefits, who watch their children having a hard time securing the same coverage starting out. Cantor and colleagues note that such provisions provide less help to young adults whose parents lack access to generous health benefits will be forced to rely more heavily on Medicaid and the new health insurance exchanges slated for full implementation in 2014.

If Republicans prevail in 2012, they may substantially overturn PPACA. If this comes to pass, popular and successful PPACA provisions to expand dependent care might well remain in force, even as other measures to expand coverage are repealed. In that world, what’s left behind to help middle-class young adults might well create yet another “protected public,” whose specific needs are met and who thus have smaller incentives to support more universal health reforms.

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