Economic Snapshot | Health

Health reform helps young adults

Between 2009 and 2011, 19-to-25-year-olds experienced the largest decline in employment, but were the only group to experience gains in employer-sponsored health insurance (ESI) coverage and dependent ESI coverage. The figure below compares changes in the employment rate and the rate of ESI for various age groups and shows that employment rates dropped among all groups. Correspondingly, the rates of ESI also dropped for all age groups, except the 19–25 cohort.

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Most people find health insurance on the job, so it is not surprising that ESI declined along with employment for most age groups. In 2010, several elements of the Patient Protection and Affordable Care Act took effect, notably, the provision allowing young adults up to age 26 to stay on or join their parents’ ESI. With data from 2011 now available, it is easy to illustrate the success of this provision in insuring young adults.

Given the close relationship between labor market outcomes and ESI, we would expect declines in coverage for all groups. What we see instead is that ESI actually increased among young adults. This is because the coverage rate rose particularly among young adults who had ESI as a dependent, the very type of coverage the provision should have affected.

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