Adult ‘Children’ and the Affordable Care Act
As a provision of the Affordable Care Act (ACA), adult children up to 26 years old can now be covered under their parents’ health insurance policies. Is this a good thing? Alan Katz, in a recent blog, called it a ‘relatively’ good thing and cited it as one of the most popular features of the ACA with more than 600,000 individuals taking advantage of it. I, however, am uneasy about it.
The new law’s provision applies to any ‘child’ under the age of 26 whose parent is covered by health insurance that provides dependent coverage. It doesn’t matter if the young adults are financially independent or on their parents’ tax return. Moreover, it’s OK if they are married and even have children of their own. And, unless the health plan has been ‘grandfathered’ (not changed in any respect since March 2010), young adults can be covered by their parents’ health insurance even if they are eligible for their own employer- provided health insurance. On top of that, this particular benefit is not means tested. It doesn’t matter if these adult ‘children’ can afford to buy their own insurance.
So what’s not to like? To start with, it’s not free. The Department of Health and Human Services estimates a 1% increase every year until 2014 when uninsured people will be guaranteed insurance coverage through state insurance exchanges. Most of the enrollment so far is taking place through self-insured employers who share the added expense with their employees. It, therefore, becomes another factor in rising employer health benefit costs. Because of this, some employers are eliminating dependent coverage. One small business had so many 18-25 year olds drop their employee health insurance in favor of their parents’ that the average group age rose, making the insurance so expensive the business had to drop health coverage for the rest of its employees.
But, the real source of my unease with this provision is that it breeds a sense of entitlement and dependency to a new group, young adults. First of all, 25 year olds are not children. They can vote, drink, and be drafted into combat. Why would we treat them as children still dependent on their parents? Traditionally, we bring our children up to be independent, to be responsible, and to work for what they need. Entitlement means that if I need something, I’m entitled to get it without worrying about who ultimately has to pay for it. Having others pick up the burden of providing one’s life necessities doesn’t make for responsible, self-reliant adults.
The justification given for adding this provision to the ACA is that many young adults are without insurance because they often work for small companies that don’t provide health coverage; or they have pre-existing conditions that make it difficult to get health insurance. Some don’t make enough money to buy their own insurance. However, government programs like Medicaid, already exist to cover financial hardship. Another government initiative, the Pre-Existing Condition Insurance Plan, provides for state-wide special ‘pools’ for people who otherwise couldn’t get health insurance. This new entitlement is unnecessary.
The problem is that once people have an entitlement, they won’t give it up no matter what the cost to others might be. The best example of this is the public and political reaction to suggestions that Medicare must change. Even though the facts are irrefutable that Medicare is a leading factor in our growing, record breaking national debt, seniors across the country, are against any measure that might threaten their entitlement. Is the ACA making us a nation of dependents?