ACA dependent coverage provision reduced high out-of-pocket health care spending for young adults

Susan H Busch, Ezra Golberstein, Ellen Meara
Health Affairs 2014, 33 (8): 1361-6
Since September 2010 the Affordable Care Act (ACA) has required that insurers allow children to remain as dependents on their parents' private insurance plans until age twenty-six. Studies have shown that this provision increased coverage rates among young adults. In this article we analyze whether the provision also protected young adults from large and uncertain out-of-pocket expenses. We found that the policy was associated with a statistically significant reduction in the share of young adults facing annual out-of-pocket expenditures greater than $1,500 (decreasing from 4.2 percent to 2.9 percent), compared to an increase in the proportion of their slightly older peers facing such expenditures (increasing from 4.4 percent to 5.4 percent), a net difference of -2.4 percentage points, or 57 percent. We conclude that the dependent coverage provision in the ACA provides financial protection for young adults at a time when they often face high debt burden but low wages.

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