Early Impact of the Affordable Care Act on Health Insurance Coverage of Young Adults

This ACA provision led to a rapid and substantial increase in the share of young adults with dependent coverage and a reduction in their uninsured rate in the early months of implementation, which represents a rare public policy success in the effort to cover the uninsured.

Abstract

RESEARCH OBJECTIVE: To evaluate one of the first implemented provisions of the Patient Protection and Affordable Care Act (ACA), which permits young adults up to age 26 to enroll as dependents on a parent's private health plan. Nearly one-in-three young adults lacked coverage before the ACA. STUDY DESIGN, METHODS, AND DATA: Data from the Current Population Survey 2005-2011 are used to estimate linear probability models within a difference-in-differences framework to estimate how the ACA affected coverage of eligible young adults compared to slightly older adults. Multivariate models control for individual characteristics, economic trends, and prior state-dependent coverage laws. PRINCIPAL FINDINGS: This ACA provision led to a rapid and substantial increase in the share of young adults with dependent coverage and a reduction in their uninsured rate in the early months of implementation. Models accounting for prior state dependent expansions suggest greater policy impact in 2010 among young adults who were also eligible under a state law. CONCLUSIONS AND IMPLICATIONS: ACA-dependent coverage expansion represents a rare public policy success in the effort to cover the uninsured. Still, this policy may have later unintended consequences for premiums for alternative forms of coverage and employer-offered rates for young adult workers.