Wednesday, December 14, 2011

So Laws do Work!

Amazing. The new health care act requires employers who offer health insurance to employees to cover children up to the age of matter whether those "children" live at home, work elsewhere, are in college or not...

And with this mandate in place for almost a year, the Administration reports that almost 2.5 million additional young adults have received coverage.

We should not be surprised that this part of the health care law works.

I am a little ambivalent about it. Hopefully nobody thinks it comes for free, as any employer who falls under this mandate will experience additional costs. Those costs are generally going to be borne by employees, through higher health care premia, lower wages, and fewer jobs. Any self-insured employer could have offered such coverage on their own in the past; the fact that they did not might reveal that employees were not willing to bear the cost.

I also don't really like the principle and economics of making an employer responsible for the health care of a 25 year old who has nothing to do with that employer other than being the child of an employee. There is really nothing the employer is going to be able to do to influence the health of that individual (for actual employees, the employer might be able to do some things in the workplace to improve health). The law also really makes parents continue supporting their children well past the usual age where the youngsters are pushed out of the nest. Heck, why don't we mandate college tuition to be covered too?

The nice aspect of the law is that it does get young adults into the health insurance market during a time when they might choose to go without coverage. It seems to me that this law coupled with a "continuous coverage" provision would go a long way to making an individual mandate less necessary. So kids get covered through 26 with employer coverage; if they want health insurance at any other point in their life, let insurers put in a continuous coverage clause: an insurer must issue coverage so long as the individual has had continuous coverage. If someone has not had continuous coverage, have a high risk pool available, but make there be a cost to not maintaining continuous coverage.

1 comment:

Anonymous said...

You raise good points. It seems this will result in many more delaying reality, costing loss of work experience. Another step towards Spain-like youth unemployment rates.