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Four and a Half Million Young Adults Have Gained Health Care
Coverage Since 2010, Improving Access to Care and
Benefitting Our Economy
By Jason Furman and Matt Fiedler
Guest Column
Young adults historically faced unique challenges in
obtaining health insurance coverage. In 2009, nearly
one-third of young adults ages 19-25 lacked health
insurance, more than twice the rate for Americans overall.
But the nation has since made dramatic progress in expanding
coverage among young adults, thanks to the Affordable Care
Actīs provision allowing young adults to remain on a
parentīs plan through age 26 and its broader expansion of
coverage through the Health Insurance Marketplaces and
Medicaid.
From the time the first of these provisions took effect in
2010 through the second quarter of 2014, the uninsured rate
among young adults dropped by more than 40 percent,
corresponding to 4.5 million additional insured young
adults. These large gains among young adults are a major
reason that the nationīs overall uninsured rate was at or
near the
lowest
level ever recorded
as of the second quarter of last year. Moreover, there is
evidence young adultsī expanded access to coverage is
increasing their access to health care, improving their
health and financial security, and potentially generating
long-term benefits for our economy.
Even with this progress, almost one in five young adults
remains uninsured. But many of these young adults are
eligible for financial assistance to obtain coverage through
the Health Insurance Marketplaces or eligible for coverage
through Medicaid. This yearīs Open Enrollment period ends on
February 15th, so those still without insurance should
visit
HealthCare.gov
or call 1-800-318-2596 to get covered now.
Young Adults Historically Faced Challenges in Obtaining
Health Insurance
Before the Affordable Care Act, young adults faced
particular challenges in obtaining health insurance.
Working-age Americans typically get health insurance
coverage through an employer. But many young adults are
still in school full-time, and even those who are employed
are less likely to be offered health insurance than their
older counterparts (for example, because they are working
part time or in sectors less likely to offer health
benefits). Historically, young adults were also much less
likely than children and seniors to qualify for coverage
through public programs like Medicare and Medicaid.
This landscape left many young adults with few affordable,
accessible options. Some could seek coverage under a
parentsī plan, but non-students and older students
frequently were not eligible for dependent coverage. Others
could seek to purchase coverage on the individual market,
but such coverage was often unaffordable or outright
unavailable before the Affordable Care Act, particularly for
individuals with pre-existing health conditions. It is thus
unsurprising that young adults had the highest uninsured
rate of any age group. As of 2009, 32.7 percent of young
adults ages 19-25 were uninsured, more than twice the 15.4
percent uninsured rate for the population as a whole.
Cumulative Coverage Gains for Young Adults Total 4.5 Million
Since 2010
The Affordable Care Act has greatly expanded the insurance
options available to young adults. Starting in late
September 2010, the law allowed young adults to remain on a
parentīs health insurance plan until turning age 26.
Following that change, the uninsured rate among young adults
ages 19 to 25 -- the age group affected by the
expansion-fell sharply, even as the uninsured rate among
other non-elderly adults remained basically flat. On the
basis of this contrast,
multiple
groups
of
researchers
have concluded that the coverage gains for young adults
during this period were directly attributable to the
Affordable Care Act provision.
The lawīs broader coverage provisions, including the
opportunity for states to expand their Medicaid programs,
insurance market reforms, and financial assistance for
eligible individuals purchasing coverage through the Health
Insurance Marketplaces, took effect at the beginning of
2014. As CEA has noted previously, thanks to these
provisions of the law, 2014 saw the
sharpest
decline
in the nationīs uninsured rate in four decades, with further
declines likely in the years ahead. Young adults were no
exception and, in fact, experienced larger gains than other
age groups over this period.
In total, from the four quarters preceding the Affordable
Care Actīs dependent coverage expansion through the second
quarter of 2014, the uninsured rate for young adults has
fallen by 14.8 percentage points, a reduction of more than
40 percent that translates into 4.5 million additional young
adults with health insurance coverage. These gains have
eliminated more than two-thirds of the gap in uninsured
rates between young adults and other non-elderly adults,
even as other non-elderly adults also experienced large
coverage gains during 2014.
Expanded Coverage Improves Access to Care, Health, and
Financial Security
An extensive body of
economic
evidence
demonstrates that having health insurance improves access to
health care, financial security, and health. Researchers
have now begun to look at the Affordable Care Actīs
dependent coverage expansion specifically and have found
evidence that it is generating all of these benefits. To do
so, researchers have generally compared trends for young
adults ages 19-25, who were affected by the early dependent
coverage expansion, to trends for slightly older adults, who
were not.
This work has found strong evidence that the dependent
coverage expansion increased young adultsī access to health
care. In particular, the expansion reduced the likelihood
that young adults had
delayed
or forgone care
due to cost in the last 12 months, a finding illustrated by
the sharp reduction in this measure for 19-25 year olds
relative to slightly older adults. Other work has concluded
that the expansion increased young adultsī ability to obtain
inpatient
and
mental
health
care, while possibly
reducing
emergency department utilization.
To date, less research has examined the consequences for
young adultsī health and financial security. One study that
did examine
these
outcomes
found, however, that the expansion increased the share of
young adults reporting excellent mental and physical health,
while reducing young adultsī exposure to out-of-pocket
costs.
Reduced "Job Lock" May Generate Major Labor Market Benefits
for Young Adults
Before the Affordable Care Act, many peopleīs only source of
health insurance coverage was through their workplace. This
could trap workers in jobs that offered health insurance,
rather than allowing them to make the employment choices
that best matched their career and life plans, reducing
economic efficiency. This phenomenon is often referred to as
"job lock." The economic consequences of job lock may be
particularly serious for young workers, both because young
workers are particularly likely to want to take time out of
the labor force to pursue schooling and because early-career
job matches may have a large effect on long-term career
trajectories.
Intriguing evidence on the labor market effects of expanding
coverage to young adults comes from a
recent
study
that examined pre-Affordable Care Act state laws that
allowed some young adults to remain on a parentīs plan at
older ages. These state laws were typically narrower than
the Affordable Care Act provision since they generally did
not apply if the young adultīs parent received coverage
through a large employer. However, these laws have been in
effect for a much longer period, making it possible to
examine longer-term labor market consequences.
This study concluded that living in a State with a dependent
coverage law during young adulthood increased educational
attainment, at least for men, and boosted menīs and womenīs
wages later in adulthood by more than 1.5 percent on
average. A 1.5 percent wage increase translates into about
$650 per year for the typical full-time, year-round worker.
Because the Affordable Care Actīs coverage expansions
benefit a broader swath of young adults (including young
adults whose parents work at large employers and young
adults whose parents do not have coverage), its long-term
labor market benefits could be even larger. While this study
is not the last word on this topic, the results imply that
the long-term economic benefits of expanding young adultsī
coverage options are an important area for further research.
Jason Furman is the Chairman of the Council of Economic
Advisers. Matt Fiedler is a Senior Economist on the Council
of Economic Advisers. |
