One of the first aspects of the health reform law to be implemented was a requirement that parents be allowed to keep children aged 19-25 on their health insurance policies. The rationale was that this group often is in educational and job flux and has high rates of uninsurance. Employers have indicated that this provision has driven up the costs of health insurance. The Health Care Cost Initiative has issued a report looking at cost and utilization trends among this group. (HCCI Report) The provision was effective in 2011 and the number of people with insurance coverage in this group rose by 3.1 million by December 2011. The study period included the years 2007 to 2012 and looked solely at young adults covered by employment-based insurance policies. During this period, per capita spending increased an average of 5.9% for this group and the increase was 5.4% in 2012. These rates of growth were higher than the per capita rates of increase for any other adult age cohort. Spending for males rose faster than health spending for females, but the actual amount of spending on young women remained significantly higher than for young men, likely due to pregnancy and related services. The types of services with the highest rates of growth were emergency room visits, on which spending rose 15.6% in 2011, and mental health and substance abuse treatment, particularly inpatient admissions which nearly tripled over the study period. Per capita spending for the year 2012 was only $2548 for this group, however, indicating what little need there is for medical care among this group. So you could say it is no big deal to require that they continue to have access to coverage under a parent’s policy or you could say that for most of these young adults, having health insurance is largely pointless. There is likely some adverse selection effect, as those young adults with a serious illness or other likelihood of higher medical spending, are most likely to enroll for coverage.
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About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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