A Reevaluation of the Effects of State and Federal Dependent Coverage Mandates on Health Insurance Coverage
36 Pages Posted: 15 Aug 2018
Date Written: July 27, 2018
State governments have been passing laws mandating insurers to allow young adults to stay on their parents' health insurance plans past the age of 19 since the 1970s. These laws were intended to increase coverage, but research has been inconclusive on whether they were successful. We reconsider the issue with an improved approach featuring three key elements: a new, accurate dataset on state mandates; recognition that effects could differ greatly by age due to take up rate differences; and avoidance of endogenous characteristics when identifying mandate eligible young adults. We find the impact of the state mandates was concentrated among the 19 to 22 age group, for which dependent coverage increased sharply by about 6 percentage points. Overall coverage increased by almost 3 percentage points, with the difference explained by crowd out of public insurance. Crowd out of coverage through young adults own jobs was negligible. For those above age 22, we find little evidence of changes in coverage. We incorporate these insights into analysis of the Affordable Care Act (ACA) dependent coverage mandate, showing its effects were focused among those whom were previously ineligible for state mandates, or were eligible but older than 22. We argue the ACA's impact was broader because it had fewer eligibility conditions that implied parental dependence; young adults could be on their parents' insurance but still be relatively independent.
Keywords: Health Insurance, Dependent Coverage Mandates, Affordable Care Act
JEL Classification: I13, I18, H75, H11
Suggested Citation: Suggested Citation