Pa. Insurers Must Let Young Adults Stay on Parents’ Policies

Published August 1, 2009

Pennsylvania Gov. Ed Rendell (D) on July 1 signed into law a measure requiring health insurance providers to allow single, childless adults up to the age of 29 to stay on their parents’ policies.

Proponents of Pennsylvania Senate Bill 189 say the measure will provide inexpensive coverage for uninsured Pennsylvanians between the ages of 19 and 29, a group state legislators say represents up to 40 percent of the Keystone State’s uninsured population.

“This bill will allow ‘adult children’ to carry health insurance for about $300 per month by staying on their parents’ plans,” said Anna Fitzsimmons, chief of staff for SB 189 sponsor state Sen. Jake Corman (R-Belafonte).

“We’re trying to increase access to health care,” Fitzsimmons said. “The bill does not create new taxpayer-funded subsidies and will cost less than Pennsylvania’s subsidized health insurance plan for low-income adults. This is a revenue-neutral thing for the Commonwealth, and we think of it as win-win.”

Mandates Increase Costs

Kevin Wrege, president of Pulse Issues and Advocacy, a health care advocacy and policy organization, offered some praise but criticized the move for avoiding dealing with more serious problems, saying other measures would better encourage young people to carry health insurance.

Wrege praised the bill for requiring families to pay their own increased premiums, rather than deflecting costs to others, but he said, “The legislation doesn’t address affordability, which is the real reason so many young adults opt not to carry health insurance.”

Special Interests Benefit

Every health insurance policy sold in Pennsylvania must cover 52 different benefits under state law, according to the Council for Affordable Health Insurance’s “Health Mandates in the States 2009.” That drives up costs and complicates what should be fairly simple policies for healthy young adults, said Christie Herrera, director of the Health and Human Services Task Force at the American Legislative Exchange Council.

“The amount of regulation in [Pennsylvania] is driving young people away from the market and keeping them uninsured,” said Herrera.

Nate Benefield, director of policy research at the Commonwealth Foundation, agreed. “Special interests drive state mandates on insurance and increase its cost. Further, too much coverage encourages people to overuse medical services, since they don’t have to pay for them. It would be better if people could opt for coverage of specific special procedures.”

With fewer regulations, insurance costs for an individual plan covering a typical 20-something with no serious health problems could be very affordable, said Wrege. Herrera agrees, saying such a policy could easily be obtained for about $170 per month, just over half the cost of a policy under SB 189.

“Having one-size-fits-all policies as they do in Pennsylvania, that’s just bad policy,” Herrera said.

Interstate Purchasing Solution

Benefield said more residents would likely opt to carry insurance if allowed to purchase their policies from states where coverage is cheaper.

“For residents of highly regulated states, an ability to purchase insurance across state lines would increase competition among insurance providers,” Benefield said.

“This is a benign bill, but it takes the focus off the real issue,” said Wrege. “We want to get young adults off their parents’ health insurance policies, just like we want to get them out of the house, frankly.”

Whitney Stewart ([email protected]) writes from Minnesota.

For more information …

Pennsylvania Senate Bill 189:

“Health Insurance Mandates in the States 2009,” Council for Affordable Health Insurance: