How the Affordable Care Act Is Helping Young Adults Stay Covered

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Young adults are among the groups most likely to be uninsured in the United States. According to the latest census data, nearly 15 million people ages 19 to 29—one-third of those in this age group—lacked health coverage in 2009. Over the last decade, the number of uninsured young adults climbed by 4 million. These high uninsured rates are due in part to the fact that young adults are often excluded from their parents' policies when they graduate from high school or college. And those insured through Medicaid or the Children's Health Insurance Program generally age off this insurance at age 19. As new entrants to the labor market, young adults face significant challenges finding full-time employment that carries health benefits.

But new health plan enrollment numbers suggest the Affordable Care Act is already turning the tide for many young adults, providing new protections to the 2011 graduating class. The law's requirement that health plans that offer dependent coverage allow those under the age of 26 to remain on or join their parents' policies has led to an increase of 600,000 young adult enrollees in five health plans. By September 2011, when all health plans with dependent coverage will include young adults, the number of them who will be newly covered is certain to climb.

Still, most of today's uninsured young adults will gain coverage only when the central provisions of the law take effect in 2014. Nearly half of uninsured young adults, or 7.2 million individuals, are in families with incomes under 133 percent of the federal poverty level (FPL)—$14,404 for a single person and $29,327 for a family of four—and most of them will become eligible for newly expanded coverage under the Medicaid program. An additional 4.9 million have incomes between 133 and 400 percent of the poverty level (from $14,404 to $43,320 for a single person) and will qualify for subsidized private coverage.

New findings from the Commonwealth Fund 2010 Biennial Health Insurance Survey underscore why health reform has become so important for those in this age group. As their numbers climbed over the last decade, more and more uninsured young adults were exposed to the rapidly rising costs of care. Forty-five percent reported that cost considerations led them to forgo needed care in 2010, up from 32 percent in 2001. This meant they did not fill prescriptions, did not go to a doctor or specialist when necessary, and did not get recommended follow-up treatment. The survey also found that young adults have been struggling to pay their medical bills. Nearly 40 percent reported they had not been able to pay their bills, had been contacted by a collection agency about unpaid bills, had to change their way of life to pay their bills, or were paying off medical debt over time. Of those struggling with medical bills, one-third had depleted their savings to pay their bills and nearly one of five (18%) took on credit card debt.

Young adults in low- and moderate-income families and those without health insurance have experienced the greatest deterioration in health security over the last 10 years. About half of those in families with incomes of less than 200 percent of the FPL ($21,660 for a single person and $44,100 for a family of four) said they had delayed health care because of cost or had difficulties paying their medical bills. Half of uninsured young adults reported difficulties paying their medical bills—twice the rate among insured young adults. And nearly six of 10 (58%) uninsured young adults reported delaying care because of cost, compared with one-third (34%) of those who had health insurance all year.

The Affordable Care Act will provide near-universal coverage to young adults, enabling them to pursue their educational and career goals without incurring the risk of catastrophic health care costs. The law will help by:

  • letting young adults remain on or join their parents' health plans up to age 26 (this provision went into effect in 2010);
  • requiring college health plans to meet new standards, starting in 2012;
  • significantly expanding Medicaid eligibility to cover all adults with incomes below 133 percent of the FPL, beginning in 2014; and
  • creating new state health insurance exchanges with subsidized private insurance for people with incomes up to 400 percent of the FPL, beginning in 2014.

Of the 14.8 million young adults who were uninsured in 2010, up to 12.1 million could gain subsidized coverage once all of the law's provisions take effect in 2014: 7.2 million in families earning less than 133 percent of the FPL would gain coverage under Medicaid and 4.9 million earning between 133 and 399 percent of the FPL would gain subsidized private coverage through the insurance exchanges. In addition, about 1 million uninsured young adults with incomes of 400 percent of the FPL or higher are expected to either join their parents' health plans or purchase policies through the exchanges, giving them access to more comprehensive coverage with greater protections than are available to them today. About 1.8 million uninsured young adults are undocumented immigrants and would not be eligible for Medicaid or coverage through the exchanges.

Millions more young adults who now spend substantial portions of their income on health plans that often provide little protection will also gain significantly, thanks to subsidies that improve benefits and offer relief from high out-of-pocket costs. Rather than spending their savings on medical bills, young adults will be able to invest in higher education or start families. To ensure a more stable future for 2011 graduates and their families, it is critical that federal and state policymakers continue implementing all provisions of the Affordable Care Act over the next three years.

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