1. THE COMMONWEALTH FUND Rite of Passage: Young Adults and the Affordable Care Act of 2010 Sara R. Collins, Ph.D. Vice President, Affordable Health Insurance Jennifer L. Nicholson, M.P.H. Associate Program Officer The Commonwealth Fund The Alliance for Health Reform and The Commonwealth Fund The New Health Reform Law and Young Adults Briefing May 24, 2010

2. THE COMMONWEALTH FUND Exhibit 1. Young Adults and the Affordable Care Act 13.7 million 19-29 year olds were without health insurance in 2008, about 30 percent of uninsured people under age 65. The Commonwealth Fund Survey of Young Adults found that 76% of uninsured young adults did not get needed health care because of cost. 46% of uninsured young adults with a chronic health problem reported that their condition had worsened in last 12 months as a result of not getting care soon enough. An estimated 11.3 million young adults, both insured and uninsured, reported on that they were paying off medical debt over time. Of those 50 percent had asked family members for financial help, 31 percent delayed education or career plans, and 39 percent were unable to meet other debt obligations like school loans. Gaps in health insurance coverage among young adults are linked to critical transition points in young adults lives: –Aging off parents plans at high school or college graduation –Losing eligibility for Medicaid and CHIP at age 19. The Affordable Care Act will bring sweeping change to the health insurance coverage of young adults over the next few years by insuring millions, eliminating coverage gaps at key transition points, and protecting young adults and their families from high out of pocket costs and medical debt. Source: SR Collins and JL Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010, (New York: The Commonwealth Fund, May 2010).

3. THE COMMONWEALTH FUND Exhibit 2. Affordable Care Act: Provisions Benefitting Young Adults Young adults on parents plans to 26 (September) Prohibitions against lifetime benefit caps & rescissions (September) Public reporting by insurers on share of premiums spent on non-medical costs Coverage and no cost-sharing for preventive care in Medicare and private plans Source: SR Collins and JL Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010, (New York: The Commonwealth Fund, May 2010). Insurers must spend at least 85% of premiums (large group) or 80% (small group/individual) on medical costs or provide rebates to enrollees Medicaid expanded to 133% of poverty Insurance market reforms including no rating on health State insurance exchanges Essential benefit standard Premium and cost sharing credits for exchange plans Premium increases a criteria for carrier exchange participation Individual requirement to have insurance Employer shared responsibility penalties

4. THE COMMONWEALTH FUND Exhibit 3. Young Adults On Parents Policies to Age 26: Federal Estimates of Take-up and Effect on Premiums, 2011 Source: US Department of the Treasury, US Department of Labor, US Department of Health and Human Services, Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 under the Patient Protection and Affordable Care Act, Low EstimateMid-range EstimateHigh Estimate Young Adults Newly Enrolled on Parents Plans (millions)0.681.242.12 Previously Uninsured (millions)0.190.651.64 Incremental Premium Cost per Young Adult$3,670$3,380$3,220 Increase in Group Family Insurance Premiums0.5%0.7%1.2%

5. THE COMMONWEALTH FUND Exhibit 4. Three-Quarters of Young Adults Who Had Insurance Through Their Parents Employer While in College Lost or Had to Switch Insurance After College Continued to get insurance through same source 23% Dont know/ refused 1% * Among those who had a gap between losing and gaining new insurance, or who went without insurance after graduating from or leaving college, or who did not have insurance when they graduated from or left college. Note: Numbers may not sum to 100% because of rounding. Source: SR Collins and JL Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010, (New York: The Commonwealth Fund, May 2010). Switched to a new source 43% Lost insurance 32% <1 month 14% 1 year to <2 years 14% 6 months to <1 year 15% What happened to health insurance when graduated from or left college >1 month to <6 months 33% 2 years or more 23% Did not have insurance 2% Length of time without insurance* Dont know/ refused 1%

6. THE COMMONWEALTH FUND Federal Poverty LevelPercent Number Uninsured Premium Subsidy Cap as Share of Income Cost-Sharing Cap as Share of Medical Costs <133% FPL52%7,139,948Medicaid 133%–149% FPL7%908,5203.0%–4.0%6% 150%–199% FPL13%1,726,1714.0%–6.3%13% 200%–249% FPL9%1,270,8586.3%–8.05%27% 250%–299% FPL5%740,0818.05%–9.5%30% 300%–399% FPL7%912,3039.5%30% Subtotal (133%-400%FPL) 41%5,557,9333.0%–9.5%6%–30% >400% FPL7%973,338-- Total100%13,671,219-- Exhibit 5. Distribution of 13.7 Million Uninsured Young Adults by Federal Poverty Level in 2008 and Provisions in Affordable Care Act Uninsured young adults ages 19–29 Source: SR Collins and JL Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010, (New York: The Commonwealth Fund, May 2010).

7. THE COMMONWEALTH FUND Annual premium amount paid out-of-pocket by 25 year old plus premium subsidy 150% FPL 400% FPL Subsidy Exhibit 6. Estimated Annual Premium Paid Out-of-Pocket Net of Subsidies for Coverage Purchased in Insurance Exchanges * 200% FPL300% FPL 500% FPL * For an individual in a medium-cost area in 2009. Premium estimates are based on an actuarial value of 0.70. Actuarial value is the average percent of medical costs covered by a health plan. FPL refers to federal poverty level. Kaiser Family Foundation Health Reform Subsidy Calculator–http://healthreform.kff.org/Subsidycalculator.aspx.. Source: Source: SR Collins and JL Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010, (New York: The Commonwealth Fund, May 2010). Age 25 Full Premium = $2,637

8. THE COMMONWEALTH FUND Exhibit 7. Support for a Requirement for Everyone to Have Health Insurance Percent of young adults ages 19–29 who strongly or somewhat favor a proposal that requires everyone to have health insurance 62 73 47* 62* * Difference is significant at p<.05, compared with Democrat. Note: Numbers may not sum to totals because of rounding. Source: Source: SR Collins and JL Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010, (New York: The Commonwealth Fund, May 2010).

9. THE COMMONWEALTH FUND Acknowledgements Jennifer Nicholson, Associate Program Officer Sheila Rustgi, Program Associate Karen Davis, President www.commonwealthfund.org Cathy Schoen, Senior Vice President, Research and Evaluation