Tuesday, May 11, 2010

Health Insurance Coverage For Young Adults Moves Forward

Today the Obama administration issued proposed regulations to implement a provision in the health care law that would allow adult children to stay on their parents’ health insurance policy until age 26. The regulation would allow children who do not live with their parents or who are not a dependent on a parent’s tax return to receive the expanded coverage. The young adult could be married and still qualify but neither their spouse or their child could receive the expanded coverage. According to the Department of Health and Human Services, the new regulation is expected to increase the cost of employer sponsored health insurance by 0.7 percent next year, or $3,380 for each dependent


This is all smoke and mirrors.

If you are on a group plan through your employer, you and your employer will split the increase depending on how much of a percentage you pay for health insurance. In essence the employer is the one footing the bill, or maybe not, I see employers increasing the percentage an employee puts in for health insurance to cover the increase. Ultimately there is nothing extra benefiting the employee.

If you have individual family insurance, you premium will go up by 1% as well however it would probably be cheaper for the child to be on their own separate plans. The 19-26 age groups are the cheapest to insure and if insured separately from the family plan, would come in cheaper than the 1% increase, in some states it would be $2,000 cheaper. This option is not available for employer group plans.

This legislation does add on advantage to those under 26, if they are high risk individuals, they would not be able to get insurance on their own. Through an employer group plan, they would have guaranteed insurability.

This would explain the 1% increase from a family plan to an individual plan for the child. The only people that will their children to the age of 26 are those that have children in the high risk pool. To cover the cost, the insurance companies would need to raise the premiums on the group plans and I believe it will be more than 1%.

If you do not have a child that is 24-26 and think you will come away unscathed, you are mistaken. Who is footing this bill, well everyone, equally of course. If you are in a group plan this increase to the family plan will affect everyone not just those with adult age children.

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