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  • Side Effects: Obamacare's "Donut Hole" for Young Adults

    College seniors are eagerly ordering caps and gowns for May graduation ceremonies.  But graduation day often brings loss as well as gain.  Many graduates will lose coverage under their parents’ health plans as soon as they get their diplomas.

    It wasn’t supposed to be that way.  Obamacare promised to let “children” remain on their parents’ health plan until the age of 26. It was one of the few provisions in the law to attract bipartisan support.  Yet the hastily drafted legislation managed to botch even this seemingly simple reform.

    Young adults constitute “one of the biggest groups of the uninsured,” according to the Fiscal Times.  The paper cites a Commonwealth Fund survey of 2,002 young adults that found that nearly half (45 percent) of those aged 19 – 29 lacked coverage for at least part of 2009.

    The coverage gap often starts when young people graduate college.  The survey found more than three of every four college students carried coverage while in school, but 28 percent lost it upon graduation.  Close to half of those who wind up with coverage after graduation experience a temporary gap in coverage.

    It promises to be no better this May.  The extended “child coverage” provision of Obamacare doesn’t kick in until months after this year’s spring graduation ceremonies. So, yes, there is a coverage gap. No problem, unless you get sick or have an accident. Those with pre-existing conditions can find it all but impossible to purchase coverage on the individual market.

    Bipartisan or not, it’s hardly a triumph of enlightened social policy to have adult “ children” on their parents’ insurance, or sleeping in the basement apartment when they should be out—yes, out of the house—and on their own. Rather than pursue systemic reform that would remove the difficulty of purchasing insurance on the individual market due to pre-existing conditions, the new law creates hastily crafted “fixes” that only exacerbate existing problems.

    Posted in Obamacare [slideshow_deploy]

    10 Responses to Side Effects: Obamacare's "Donut Hole" for Young Adults

    1. Andrew, Arlington VA says:

      For the love of God and the English language, the word is spelled "doughnut."

    2. Rebekah, GA says:

      While I agree that young adults should be out of the house and supporting themselves as soon as possible (i.e. after college graduation) this economic climate hardly allows for such a scenario. Not to mention it's taking kids closer to five years, rather than four, to complete a college degree. Because of the competitive job market, many college grads are opting to go onto graduate school rather than the workforce. Rather than leaving this population of people uninsured, if the parents are willing, why not allow them to stay on their parents insurance? I see no problem with that.

    3. Pingback: » Financial News Update – 04/14/10 NoisyRoom.net: There are two ways to conquer and enslave a nation. One is by the sword, the other is by debt. John Adams

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    5. Mike, Phoenix, AZ says:

      OK, so I am 23 years old and my wife is 22 years old. We have two children one is 2 years old and one is three years old. Can I make grand ma and grand pa pay for their insurance also?

    6. RC, Colorado Springs, CO says:

      Why sure you can Mike, after all, it’s not like you are really an adult until well into your 30′s (or is it the 40′s that are the new 30′s that are the new 20′s that are the new teens?).

      Of course that just drives businesses to the point where they can’t afford to sponsor health insurance plans.

      BTW, I was just piling on to the obvious sarcasm Mike was indulging in.

    7. Doug, Holland Michig says:

      If I'm my Mother's legal guardian – after her stroke – and she's on MY insurance….

      Does….does that mean I can be on my Mom's coverage that I own?

      [Yeah, that's right! I'm my own Grandpa!] :)

    8. jb barnard, Palm Coa says:

      In response to Mike; I have been trying to get an answer to that from either of my Senators (1 Repubublican one Demonkrat) for the past 6 months – and no one will respond,. As I understand it, ther would be 6 or more persons sucking on one socdfialized medicine charge. This will save money how? Maybe you can get a response,

    9. john, canton, ohio says:

      the gap is real, but can be filled via COBRA since termination as covered dependent is a triggering event. Can continue for long enough for law to catch up, although costly. Would not be surprised if this gap is filled by another quick fix. Another example showing that legislating the details involving something as complicated and (un-political) as health care should be left to the markets, not the legislators!!

    10. Alex, Cape Cod says:

      I think it is a great idea to support having young people having good jobs that allow them to be out of the house and paying for their own insurance. If you find a young person in that situation please give them a medal, since it has become harder and harder for young people to be financially independent, bad economy or not.

      Real wages in many sectors are flat, while student loan debt is growing by leaps and bounds. There was a time in the U.S. when a young person could enter the workforce at 18 or even 16 and get a good job that paid a living wage and many of these young people could by their first home at 21. Those days are long gone.

      Young adults have huge student loan debts for low paying jobs. I think it is horrible that young people pay tens of thousands of dollars, some as much as $200,000 and the best offer they can get is a mere 24-30k in a major city. Where such pay might not even pay rent let alone tuition or health insurance.

      I suggest the heritage foundation base its critiques of the new healthcare law on the current economic realities not the ideals we wish where true.

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