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Nearly 1 Million Young Adults Get Insurance Under Health Law

Nearly 1 million young adults have gained health coverage this year following the passage of the health overhaul law, which lets them stay on their parents’ insurance up to age 26, according to a federal report released today.

The report’s findings show the number of people getting coverage is running ahead of the administration’s estimate of how many young adults would become insured this year under the law. The Department of Health and Human Services had predicted 1.2 million adults age 18 to 26 would elect to stay on their parents’ policies for all of 2011. The numbers released today, which come from a household survey, are for the first three months of the year.

“This is a reminder the difference the Affordable Care Act is making in the lives of Americans,” said Kathleen Sebelius, Health and Human Services secretary. She said the provision gives young Americans the freedom to work where they want rather than taking a job merely for the health coverage. “Where would we be if the inventors of Facebook had taken a desk job just to get health insurance,” she said.

The report by the Centers for Disease Control and Prevention said the number of uninsured people aged 19 to 25 decreased from 10 million in the first quarter of 2010 to 9.1 million this year. Overall, the percentage of young adults without coverage fell from nearly 34 percent to 30.4 percent.

More people have gained coverage under the young adults’ provision than any other part of the 2010 health overhaul. However, the major coverage expansion will occur in 2014 when an estimated 32 million people would begin to gain coverage as a result of increased eligibility for Medicaid and creation of new health insurance exchanges where people can buy subsidized coverage. Medicaid is the state-federal health insurance program for the poor and disabled.

Under the provision of the health law, insurers and employers must offer coverage to enrollees’ adult children until age 26 even if the young adult no longer lives with his or her parents, is not a dependent on a parent’s tax return, or is no longer a student.

Before the law was passed, dependent children generally were removed from coverage when they reached age 19 or graduated college.

The dependent coverage provision went into effect Sept. 23, 2010. However, health plans didn’t have to adopt the change until the start of the subsequent plan year, which for many companies was January. In addition, dozens of insurers voluntarily adopted the change earlier, soon after President Barack Obama signed the health overhaul law in March 2010. Coverage is available to married and unmarried children alike.

Ed Haislmaier, a senior research fellow at conservative Heritage Foundation, gives the health law only partial credit for reducing the number of uninsured young adults. He notes recent Census data showing more young adults are on Medicaid and military health insurance, for example. The Obama administration “can take credit for at most 40 percent of this increase and that is probably an outer limit,” he said. 

The CDC report found the first increase in young adults with private health coverage since 2006. The data also showed the percentage of young adults in government coverage such as Medicaid rose slightly this year. 

Rick Cronick, deputy assistant secretary at HHS, said he believes virtually all of the 3.5 percent increase in young adults with coverage is a result of the health law. He said the increase in government coverage is not statistically significant.

A new Gallup poll today also found the number of young adults without health insurance has dropped by about 1 million.

Last week, the U.S. Census Bureau reported that while the overall number of people who are uninsured climbed slightly from 49 million in 2009 to 49.9 million in 2010, the number of uninsured young adults aged 18 to 26 fell by 500,000 or 2 percent.

Several large insurers earlier this year announced big growth in young adult enrollment as the industry began reporting first-quarter earnings. Using that data, KHN reported in May that more than 600,000 young adults had signed up for coverage since the law passed.

According to the federal estimates, adding young adult coverage is likely to increase average family premiums by about 1 percent.