Effects of Federal Policy to Insure Young Adults: Evidence from the 2010 Affordable Care
Act’s Dependent-Coverage Mandate
Author(s): Yaa Akosa Antwi, Asako S. Moriya and Kosali Simon
Source: American Economic Journal: Economic Policy, Vol. 5, No. 4 (November 2013), pp. 1-
28
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/43189352
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American Economic Journal: Economic Policy 2013, 5(4): 1-28
http://dx.doi.org/10. 1257/pol.5.4. 1
Effects of Federal Policy to Insure Young Adults:
Evidence from the 2010 Affordable Care Act’s
Dependent-Coverage Mandate1
By Yaa Akosa Antwi, Asako S. Moriya, and Kosali Simon*
Using data from the Survey of Income and Program Participation
(SIPP), we study the health insurance and labor market implications of the recent Affordable Care Act (ACA) provision that allows
dependents to remain on parental policies until age 26. Our comparison of outcomes for young adults aged 19-25 with those who are
older and younger, before and after the law, shows a high take-up of
parental coverage, resulting in substantial reductions in uninsurance
and other forms of coverage. We also find preliminary evidence of
increased labor market flexibility in the form of reduced work hours.
(JEL H51, 111, 118, J13, J22)
The (ACA) earliest to take insurance effect expansion mandated that provision health of plans the March and insurers 2010 Affordable that offer dependent Care Act (ACA) to take effect mandated that health plans and insurers that offer dependent
coverage allow children to stay on their parent’s health insurance plans until their 26th
birthday (US Public Health Services Act, Section 2714, 2010). This mandate became
effective on the next plan renewal date after September 22, 2010. This extension of
dependent coverage was an important aspect of the health reform package, since young
adults have historically high uninsurance rates (Levy 2007). Full-year uninsurance
among young adults, defined in this paper as those aged 19-25 years, was 37 percent
based on Current Population Survey (CPS) data for 2008. The comparable statistics
were 18 percent for those aged 12-18 years and 25 percent for those aged 26-35 years.
There are several reasons why the difficulty faced by young adults in obtaining insurance is a significant economic and social concern. For one, research has
shown that uninsurance among young adults causes large reductions in their use of
* Akosa Antwi: Department of Economics, Indiana University Purdue University at Indianapolis (IUPUI),
Cavanaugh Hall 530, 425 University Boulevard, Indianapolis, IN 46202 (e-mail: yakosaan@iupui.edu); Moriya: The
School of Public and Environmental Affairs (SPEA) , Indiana University, Rm 4 1 2, 1 3 1 5 East Tenth Street, Bloomington,
IN 47405 (e-mail: asako.moriya@gmail.com); Simon: The School of Public and Environmental Affairs (SPEA), Indiana
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