Certain Families Will Pay Higher Health Insurance Premiums to Cover Their Children

Published: Tue 11 May 2010

Larry Roth

Certain families might pay a hefty price if they take advantage of the opportunity afforded by the new health care reform law to keep children as old as age 26 on their health insurance policies, according to regulations authored by the Obama administration.

Until the year 2014, when health policies will be barred from charging more expensive premiums on the basis of preexisting conditions, health insurers in the individual market may include young adults' medical conditions when calculating a family's annual premiums.

Moreover, in certain situations, families may be required to pay additional money to carry their adult children on their medical policies.

Published on Monday, the regulations also detail an exception to the expanded new coverage.

The stipulation "applies only to health insurance plans that offer dependent coverage in the first place: while most insurers and employer-sponsored plans offer dependent coverage, there is no requirement to do so," said the Department of Health and Human Services in a statement on Monday.

Spelling out Health Care Reform

The new announcement is part of the Obama administration's attempt to translate health care reform into more concrete regulations. The complete meaning of the massive legislation will be unknown until the regulations are spelled out.

The administration is unveiling new rules for provisions that will go into effect in 2010, and it has emphasized the additional coverage for young adults as a stipulation that will provide immediate relief for many American families. Helping families keep their adult children on their medical policies or add them to their health insurance policies until they reach the age of 26 will be particularly helpful for families with children who are graduating from college.

The Young-Adult Predicament

Young adults often forgo health insurance for a number of reasons. They often believe they do not need it, cannot afford it, or simply have jobs that do not offer medical benefits. The health care reform provision may help bridge that gap.

Roughly 2.4 million young adults might be impacted by the law's provision, 1.8 million of whom currently have insurance and approximately 550,000 have individual health insurance policies, according to the federal government.

Group medical plans, such as those subsidized by employers, may charge their employees extra to provide medical coverage to adult children if they currently base their medical premiums on the number of children included on the employee's policy, as opposed to providing a universal, flat premium to families regardless of size.

If the expenses are distributed across all families with coverage sponsored by employers, family health premiums will increase by one percent in 2012, the government predicts. In the individual health insurance market, the costs of adding young adults should average $2,400 in 2012, according to the government.