For young adults, there's a hitch in health-care law

Communications major Daniel Quick was too busy at Temple University yesterday to watch President Obama sign sweeping health-care legislation into law.

But he had been following the news about one key provision - the possibility of obtaining health insurance through his parents' health plans after he graduates next year.

"It's encouraging to me," said Quick, a junior. "That was the major thing I was worried about, even more than rent and food, after I graduated from college."

Many plans drop offspring at age 19, unless they are full-time students.

At the White House, Obama repeated the promise he made to a cheering crowd at Arcadia University in Glenside two weeks ago. "This year," Obama said yesterday, "young adults will be able to stay on their parents' policies until they're 26 years old."

Good news to Quick, but at least for the moment, the president's promise may be premature.

The bill Obama signed leaves a giant loophole, one that will be fixed if the reconciliation bill now being debated in the Senate passes.

The law exempts current insurance policies from having to include coverage for the young adults.

"That's how politics works," said Jennifer Tolbert, a policy analyst at the Henry J. Kaiser Family Foundation, a nonprofit that has been closely tracking the legislation.

Tolbert said the president was talking about the package - the law he signed yesterday and the pending reconciliation legislation in the Senate - because Senate Democrats believe they have the votes to pass the bill.

None of the legislation spells out who is supposed to pay for the coverage.

"I don't know that employers have thought it through," said Paul Fronstin, director of health research for the Employee Benefit Research Institute in Washington. "Now they have to think it out."

Young adults, ages 19 to 29, are the largest group of uninsured, and represent a third of the uninsured, according to data analyzed by Kaiser. Three in 10 don't have insurance, compared to 17 percent of those ages 30 to 64.

Half the uninsured young people work full time at jobs that don't offer health insurance. Many start at small companies, which are less likely to provide insurance.

"There's definitely a need for change," said Joseph Tesoroni, 23, coordinator of Pedal Cooperative, a West Philadelphia volunteer-based bicycle organization that collects recycling from area businesses.

Tesoroni graduated from Temple last year and has no health insurance, although he's not worried because he's never been in a hospital. "I'm taking a job in the fall that has insurance, so there's a little void right now."

Meanwhile, even as the reconciliation measure is being hotly debated in Washington, some 30 states, including Pennsylvania, New Jersey, and Delaware, already have laws in place permitting young adults to be covered under their parents' plans.

In New Jersey, people up to age 31 can be covered. Employers must offer the coverage, but parents or young people have to pay the tab.

In a Pennsylvania law enacted last year, companies can decide whether to offer coverage up to age 29 and how it should be paid for.

Of the 47,000 employers Independence Blue Cross covers, 75 have added coverage, said Elizabeth Williams, a spokeswoman for Independence Blue Cross, the region's largest insurer. "Employers are under enormous pressure these days with rising costs and decreasing revenue and it's unusual to be expanding benefits."

Yesterday's news left policy wonks like Fronstin, Tolbert, and Gretchen Young, vice president of health policy for ERISA Industry Committee, busy fielding questions.

Young's group focuses on employers who self-insure. Generally these are the largest companies who are able to spread risk over a big group. They pay medical expenses out of general operating funds. For them, adding another group of people simply counts as an additional expense, even though young people tend to be healthier.

Young sent members an advisory explaining the loophole on young-adult coverage.

The provision would be one of the first to go into effect if all the legislation is passed. The most sweeping measures - universal coverage and health exchanges - won't begin until 2014.

"Under some interpretations, certain consumer protections (such as increasing the age at which children could be kept on their parent's medical plan) would not generally apply to group health plans," she wrote.