Young Adults Shielded from Emergency Room Costs

Young adults and their families have been saved an estimated $147 million in nondiscretionary medical care because of the federal law allowing children to remain on their parents’ medical insurance through age 25, according to a new study.

The RAND Corporation’s “Insurance Coverage of Emergency Care for Young Adults under Health Reform,” published in NEJM, evaluated close to half a million nondiscretionary visits to emergency departments (EDs) from 2009 to 2011.

According to researchers, $147 million was newly covered by private insurance that otherwise would have been paid by young people and their families or been written off by hospitals as uncompensated care.

The law allowing young adults under the age of 26 to stay on their parents’ coverage began in September 2010 and was one of the first provisions under the Affordable Care Act to go into force. Once the provision took effect, private coverage of nondiscretionary visits to EDs by young adults increased by 3.1%.

“The change allowing young people to remain on their parents' medical insurance is protecting young adults and their families from the significant financial risk posed by emergency medical care,” Andrew Mulcahy, the paper's lead author and a health policy researcher at RAND, said in a statement. “Hospitals are benefitting, too, because they are treating fewer uninsured young people for emergency ailments.”

The researchers only analyzed cases involving serious or painful illnesses and injuries likely to prompt patients to seek care in EDs. In the end, only 6% of visits met the criteria. The study also compared the insurance status of young adults aged 19 to 25 with those aged 26 to 31, who were not affected by the law.

“Our findings show that young adults not only are more likely to have insurance coverage after the provision went into force, but they and hospitals also have improved financial protection,” Mulcahy said. “Because we looked at only the most-serious emergency cases to rule out the influence of insurance on the decision to seek health care, we probably underestimate the full financial benefits that the new rules have provided to young adults who need urgent medical care.”