Got questions about the Affordable Care Act? In a regular feature, the WHYY/NewsWorks Health and Science Desk is providing “The Short Answer.”
Now that the law is really rolling out, how does it affect young adults who are getting insurance through their parents’ plan?
The short answer
Young adults can stay on their parents’ plan until they are 26, but for some people, having their kids on their plan will become more expensive.
A very popular stipulation of the Affordable Care Act has been that young adults can stay on their parents’ health insurance until they are 26. Before, the age limit was typically 19, or 23 for full-time college students. One of the first parts of the law to go into effect in 2010, it has been very popular as people immediately took advantage of it.
But there is another stipulation in the law that a lot of people apparently do not know about. For certain insurance customers, once their child turns 21, the price for their premium could go up significantly, because they will count as an adult.
Who is affected?
This starts in January and affects those buying insurance as individuals, and those buying insurances as small groups, meaning employers with under 50 employees. It doesn’t matter if the small business is buying plans through the SHOP marketplace, or goes right to the insurance company.
The law changes the “family composition definition.” Until now, plans for families were typically packaged in such a way that it didn’t matter whether you have one, two, or seven children, you paid the same once you bought a family plan. Also, the age of the kids didn’t matter. You paid the same whether your kids were 5 and 7 — or 21 and 23.
How will that change for individual or small group buyers?
The Affordable Care Act changes the family composition definition. What you will pay depends on the size of your family. So, you pay a premium price for each adult family member, and the three oldest dependent children. When a kid turns 21, their premium price then goes up to adult rates, which could mean a significant increase.
On the positive side, parents can keep their kids on their plan until the age of 26. And pre-existing conditions and current medical conditions no longer figure into the price of the individual premium.