How have state policies to expand dependent coverage affected the health insurance status of young adults?

Abstract

Research objective: Nearly one in three adults of ages 19-29 lack health insurance, representing the highest uninsured rate of any age group. To help address this gap, 38 states have enacted laws requiring insurers to permit young adults to enroll as dependents on their parents' plans. This paper evaluates their impact on coverage for young adults.

Study design/methods/data: This study uses data for individuals ages 19-29 from the Current Population Survey's Annual Demographic Supplement for calendar years 2000-2008. Linear probability models are used to obtain difference-in-differences estimates of the impact of dependent coverage expansions in 19 early-adopting states on young adults' insurance status. The models also address possible policy endogeneity due to the nonrandom enactment of expansion policies across states.

Principal findings: State young adult dependent coverage policies yielded small increases in dependent coverage ranging from 1.52 percentage points for all young adults to 3.84 percentage points for those ages 19-25 residing with parents. These increases were largely offset by declines in employer-sponsored insurance (ESI) in the young adults' own name. No significant impact on young adult uninsured rates was observed.

Conclusions and implications: Adult dependent coverage expansions have had a relatively small impact on enrollment as an ESI dependent and appear to have the unintended consequence of reducing ESI policyholder coverage. This policy did not achieve a reduction in uninsured rates as policy makers had intended. Federal reform efforts to expand dependent coverage are likely to be more successful because reform will be accompanied by subsidies and enrollment mandates.