What Will Healthcare Reform Change For Young Adults?
With the recent passage of healthcare reform legislation in the House of Representatives, Democrats have succeeded in changing one-sixth of the economy. It will have far-reaching impact on the health insurance used by millions of Americans each day. Young adults will be affected greatly, both now and in the future.
One of the provisions that takes effect immediately is the extension of family health insurance benefits. Perhaps befitting the trend of more 20-somethings moving back home, they will also be allowed to remain on their parents' policy for a longer period of time. Adult children can now stay on a parent's policy until the age of 26. Before, most plans only tended to let them remain on the plan as a dependent either until the age of 25 or college graduation.
What does that mean for young adults? On a per-person basis, health insurance plans are less expensive for a family than an individual. In addition, the health insurance rates for employer-based insurance (which the majority of parents have) are cheaper. That is because the health insurer can spread the risk and cost of coverage among a larger group of people. Many young adults are either struggling to find work, freelancing, or working for small companies that don't offer health benefits. The extension of family coverage can help them.
Further down the road, there will be an extension of Medicaid, the insurance program for the poor. The eligibility limits will be expanded, meaning that more young adults will qualify. In addition, there will be subsidies available to buy health insurance in regulated exchange markets. These markets will open in 2014.
On the downside, the bill creates a mandate for individuals to buy insurance. If they don't, they will face financial penalties. Also, some young adults may end up paying more for individual health insurance plans. New regulations will prevent insurance companies from rejecting people with pre-existing conditions, or charging them significantly more. Insurers will only be allowed to charge older, middle-aged Americans premiums that are a certain ratio above those for younger consumers. In the past, they have been allowed to charge as much as 10 times more. In order to continue making a profit, insurers may charge healthy, young individuals slightly higher health insurance rates. However, young women will benefit from the regulations, which ban the practice of "gender rating": charging women more for the same coverage than men in similar health.
One of the provisions that takes effect immediately is the extension of family health insurance benefits. Perhaps befitting the trend of more 20-somethings moving back home, they will also be allowed to remain on their parents' policy for a longer period of time. Adult children can now stay on a parent's policy until the age of 26. Before, most plans only tended to let them remain on the plan as a dependent either until the age of 25 or college graduation.
What does that mean for young adults? On a per-person basis, health insurance plans are less expensive for a family than an individual. In addition, the health insurance rates for employer-based insurance (which the majority of parents have) are cheaper. That is because the health insurer can spread the risk and cost of coverage among a larger group of people. Many young adults are either struggling to find work, freelancing, or working for small companies that don't offer health benefits. The extension of family coverage can help them.
Further down the road, there will be an extension of Medicaid, the insurance program for the poor. The eligibility limits will be expanded, meaning that more young adults will qualify. In addition, there will be subsidies available to buy health insurance in regulated exchange markets. These markets will open in 2014.
On the downside, the bill creates a mandate for individuals to buy insurance. If they don't, they will face financial penalties. Also, some young adults may end up paying more for individual health insurance plans. New regulations will prevent insurance companies from rejecting people with pre-existing conditions, or charging them significantly more. Insurers will only be allowed to charge older, middle-aged Americans premiums that are a certain ratio above those for younger consumers. In the past, they have been allowed to charge as much as 10 times more. In order to continue making a profit, insurers may charge healthy, young individuals slightly higher health insurance rates. However, young women will benefit from the regulations, which ban the practice of "gender rating": charging women more for the same coverage than men in similar health.