The provision in the ACA that allows young adults to remain on their parents’ health insurance policies until the age of 26 has been one of the more popular aspects of the health reform law. It has increased the percentage of young adults with health insurance coverage and helps to make sure that recent graduates can remain insured even if they accept an entry-level job that doesn’t offer health insurance benefits.
The provision has received a lot of press coverage over the past couple years, and I would say that it’s widely understood. But this article from The Colorado Health Foundation’s Sandy Graham illustrates a lesser-known loophole in the law: The ACA was added to HIPAA, so plans that aren’t impacted by HIPAA are also not impacted by the ACA. Retiree-only plans fall into this category.
Sandy’s daughter ended up getting an individual health insurance policy for $143/month. But individual health insurance in Colorado is medically underwritten (and will be for almost two more years until the guaranteed-issue provision of the ACA begins in 2014), which means that she had to be relatively healthy in order to qualify for coverage and/or avoid an underwriting rate increase. The benefit of the ACA rule that allows young adults to remain on their parents’ plan is that there is no need for additional underwriting – the coverage is continuous, regardless of any new medical issues that might have arisen since the plan was originally purchased. This can be very useful for young adults with pre-existing conditions who haven’t yet secured a job that provides guaranteed issue group health insurance coverage.
I don’t know what percentage of the population is covered by retiree-only health plans, but it seems that group might be more likely than others to have children who are young adults. I’m sure Sandy and her husband aren’t the only parents to have found out that the ACA doesn’t apply to their retiree-only health plan.
While we’re talking about The Colorado Health Foundation, the most recent issue of their quarterly magazine – Health Elevations – includes an article about our blog. We’re thrilled and honored to be featured!