Addressing Confusion About Young Adults’ Coverage Options Under Health Reform

Despite today’s suggestions to the contrary by House Budget Committee Chairman Paul Ryan, health reform offers young adults an unprecedented range of choices for affordable health insurance coverage.  It’s allowed more than 3 million young adults under age 26 to obtain coverage under their parents’ policies, and millions more have now gained access to coverage that will begin in January, when new, federally financed premium subsidies will help reduce what low- and moderate-income people will have to pay for coverage.

Chairman Ryan overlooked those features again today.  Similar to his assertions of earlier this year, he incorrectly claimed at a House Ways and Committee hearing today that under health reform, young adults under age 26 who earn between 100 and 400 percent of the poverty line will be ineligible for federal tax credits to help pay their premiums for plans through the new health insurance marketplaces (also known as exchanges) if they can get coverage under their parents’ plan.  (Unfortunately, Marilyn Tavenner, the Centers for Medicare and Medicaid Services’ administrator, incorrectly agreed at today’s hearing that these young adults would not qualify for subsidies.)

That’s simply not true.  Most young adults have multiple coverage options.  They can obtain coverage through their parents’ plan if available, or through their own employer if their job offers health coverage.  Young adults may also qualify for Medicaid depending on their income and on whether their state has chosen to adopt health reform’s Medicaid expansion to cover low-income adults.

For young adults who are ineligible for Medicaid, premium tax credits would be an option as well, as long as they have incomes in the subsidy-eligibility range (100 percent to 400 percent of poverty), their parents don’t claim them as dependents on their tax returns, and their employers haven’t offered them affordable and adequate coverage.  The fact that they also can enroll under their parents’ policy does not in and of itself preclude them from obtaining exchange coverage using the premium credits.

Young adults have to choose their coverage options carefully, considering, for example, each available option’s costs, benefits, and provider networks.  But the bottom line is that more young people have greater access to much-needed health insurance coverage.