Sheena Reddy, 24, of Sunnyvale, Calif., went without health insurance for a year after graduating from college, but after passage of health reform earlier this year, she was able to enroll in her parents' plan.
"When my dad switched to Blue Cross and Blue Shield health insurance, I was covered," Reddy said.
She's benefiting early from a provision in the health care reform law that requires insurance companies to cover young adults up to age 26 on their parents' policies.
Some insurance companies, including Blue Cross, Coventry Healthcare Inc., Aetna and WellPoint, began offering the extended dependent coverage after the legislation was signed into law in March, even though the law technically doesn't go into effect until Sept. 23.
As an estimated 1.2 million young adults become eligible for coverage under their parents' policies this month, thanks to President Barack Obama's sweeping reforms under the Patient Protection and Affordable Care Act, industry experts say it's a step in the right direction, but not a comprehensive fix.
Health insurance, historically difficult to obtain for young adults who have graduated from high school or college but have not yet found a job, has become a more serious problem in the midst of a faltering economy and high unemployment rates.
In 2008, 13.7 million, or nearly 30 percent, of young adults between the ages of 19 and 29 did not have access to health care, according to the U.S. Census Bureau.
"High unemployment rates are significantly increasing the number of young adults who cannot afford health insurance, and the option to become a dependent on their parent's coverage will certainly change things for the better," said Willard Manning, professor of health service research at the University of Chicago.
According to research by the Commonwealth Fund, an organization based in New York, this law is applicable to insurance purchased through both the individual market and the private market and will increase both access and costs for young adults looking to insure themselves.
"A large pool of uninsured people can have access to health insurance for a relatively low cost," said Lara Cartwright-Smith, Assistant Research Professor at the George Washington University.
Increasing dependent coverage, however, is not a fix for all of the uninsured young population.
Moreover, the law will disproportionally favor upper- and upper-middle income populations. Many on the lower end of the income graph do not have parents who have employer insurance and are also unable to pay the extra premium costs.
According to Obama administration estimates, if around 1.2 million people enroll their dependents in 2011, the average annual premium cost for covering a young adult on an employer policy would be about $3,380 in 2011, $3,500 in 2012 and $3,690 in 2013.
Thus, adding dependents will end up increasing premiums for employers who purchase insurance directly from the market, but it will only have a negligible impact on large companies that are self-insured.
"On average, a family policy costs about $13,000, the family pays 27 percent of this amount and the rest is taken care of by an employer," said Linda Blumberg, principal research associate at the Urban Institute.
With the economy still on its back, experts point out that increasing health care costs could also become a disincentive for employers to offer family coverage.
"With rates going up, there might be some decision by employers to drop the family coverage and just have individual coverage for their employees," Manning said.
But even with its current limitations, the law is expected to result in about 65,000 new young adults receiving health coverage, and also serve as a temporary bridge for those who have yet to achieve economic stability.
