Young Adult Dependent Coverage: Were the State Reforms Effective?

Uninsurance in the United States is most highly concentrated in young adults. In 2009, the year prior to the passage of the Affordable Care Act, 29.3 percent of adults aged 18–24, and 28.1 percent of adults ages 25–34, had no health insurance at any point during the year, compared to 9.7 percent of children, 21.0 percent of adults 35–44, 15.6 percent of adults 45–64, and only 1.7 percent of adults 65 and older (DeNavas-Walt, Proctor, and Smith 2011). In response to this problem, dozens of states and the federal government have passed “adult dependent” coverage expansions that allow adult children to remain on their parents' health insurance plans past the default limiting age of 19. Although the opening of access to new forms of potentially more affordable insurance may positively impact young adults' probabilities of being insured, this impact could be limited if insured individuals simply switch to less expensive or more generous forms of coverage, while most uninsured individuals remain uninsured. Previous research published in the literature has suggested that state reforms have in fact increased access to private or dependent coverage. At least three studies, which are summarized in Table ​Table1,1, focus on state increases in the limiting age on health insurance coverage among young adults (Levine, McKnight, and Heep 2011; Monheit et al. 2011; Depew 2013). Despite slight differences in data, methods, samples, the coding of reform states, and the assumed timing of law adoption, all are in general agreement that the reforms increased access to certain forms of coverage, and they may have also increased the overall insurance rate among certain subpopulations of eligibles.1 All of these studies employ difference-in-differences (DD) or difference-in-difference-in-differences (DDD) models (with some disagreement over counting the numbers of differences), with the first two also using the Current Population Survey's (CPS) Annual Social and Economic Supplement (ASEC). Monheit et al. (2011) (hereafter, MCDB) report that state reform eligibility is associated with a modest increase in employer-sponsored health insurance received as a dependent, a decline in own-name employer-sponsored coverage, and no change in the overall uninsured rate. Levine, McKnight, and Heep (2011) (hereafter, LMH) find that private insurance rates increased by 2.2–4.4 percentage points in their “full sample” of adults ages 19 through 24. However, neither of these two studies takes advantage of the detailed information on coverage type tracked by ASEC, which offers an important and overlooked check on the validity of a causal interpretation of this prior work.2 The focus on outcomes such as “private coverage” or even “employer-sponsored dependent coverage” may overlook important shifts between subcategories—or worse, it could inappropriately attribute changes in one type of coverage to another. For example, an increase in employment-related coverage received as a dependent may be driven by changes in spousal coverage rather than policies targeting parental coverage. Table 1 Summary of Articles on State-Level Dependent Coverage Expansions In this study, I reevaluated the impact of state reforms on the composition of insurance held by young adults to better understand and assess the causal effects of the policies using the main dataset used to estimate insurance coverage rates in the United States generally. I employed DD (or DDD) models previously applied in the literature by MCDB and by LMH, while decomposing the insurance outcomes into nine alternative types: employment-related parental coverage, employment-related spousal coverage, employment-related coverage from an unknown source, privately purchased parental coverage, privately purchased spousal coverage, privately purchased coverage from an unknown source, employment-related insurance held in one's own name, privately purchased insurance held in one's own name, and insurance received through someone that lives outside of one's own household. If the state reforms truly worked, estimated effects on parental dependent coverage, or on coverage received from someone outside of one's own household, should be larger than the estimated effects on spousal dependent coverage, which was not specifically targeted by state dependent coverage expansions.