EVALUATING THE SUCCESS OF THE AFFORDABLE CARE ACT'S DEPENDENT COVERAGE PROVISION AND ITS IMPACT ON YOUNG ADULTS

Abstract

The Patient Protection and Affordable Care Act (ACA) was signed into law in March 2010 and was intended by policymakers to strengthen the health care system in the United States by making insurance coverage more affordable and accessible while improving health care quality. A major reform in the ACA, known as the dependent coverage provision, was targeted specifically towards young adults since those aged 19-25 have historically had the lowest rates of health insurance coverage. Section 1001 of the ACA was designed to increase insurance take-up among young adults by allowing adult children under the age of 26 to remain on their parents' health insurance plan, regardless of financial dependence or marital, employment, or student status. This paper considers whether the dependent coverage provision worked as Congress intended by examining if the ACA led to an increase in health insurance coverage and better access to care for young adults. It also looks at whether certain sub-groups of young adults were more likely to gain coverage due to the policy change.

This study uses data from the Medical Expenditure Panel Survey (MEPS) and employs a difference-in-differences logistic regression with data from the years 2009-2012 to compare insurance rates and health care access variables for young adults ages 19-25 who could remain on their parents' plans to slightly older adults ages 26-34 who were not eligible under the new policy. After implementation of the dependent coverage provision of the ACA, young adults had 23 percent lower odds of being uninsured compared to older adults. In addition to higher rates of insurance, young adults also benefited from the policy change with respect to access to care: those aged 19-25 had 11 percent higher odds of not having difficulty getting a usual source of care and nine percent lower odds of not having a usual source of care compared to those aged 26-34.

This evidence is in accordance with previous studies using other datasets like the Current Population Survey and Survey of Income and Program Participation showing that the uninsured rate for young adults dropped quickly after implementation of this provision in the ACA. Previous research has differed on whether the ACA increased access to care for young adults, and this study provides evidence that health care access was improved with respect to access to a usual source of care and other factors. It is clear that the dependent coverage provision worked as intended by insuring more young adults and increasing access to care. Further research should be conducted using data covering a longer period of time to help determine the long-term effects as well as data that can track individual and state-level identifiers.