Study on Effects of Employer-Sponsored Adult Child Coverage under ACA

A new study from the Employee Benefit Research Institute looks at the experience of one large national employer to get a feel for how the ACA’s rule allowing young adults to stay on their parents’ plans up to age 26 is having an impact. Approximately 3.1 million young people nationwide have found coverage through this provision. In 2010 and 2011, the employer studied in the report covered more than 200,000 individuals. When the new provision went into effect in 2011, the company enrolled almost 700 young adults under 26.

“The most interesting finding related to the types of health care services used by those in the adult dependent mandate cohort,” the study says. It found that 60 percent of all inpatient claims from the newly covered young adults were for mental health, substance abuse, or pregnancy treatment, compared with just a third among a peer group of young adults who already had coverage prior to the health law’s implementation. Mental health and substance abuse care amounted to 42 percent of inpatient claims in the newly covered under-26 group, but just 28 percent of claims in the peer group. Inpatient claims for pregnancy care constituted 19 percent of inpatient claims in the new under-26 group, but only 5 percent in the peer group. Treatment for injuries and infections were about the same in both groups.

Overall, the care for the newly covered young adults proved costly: The study found they used about $2 million in health care services in 2011, but this represented only about 0.2 percent of the employer’s total health spending.