Does it make sense for college students/grads to stay on parents’ health insurance?
Prior to the passage of the health care reform law in 2010, young adults were among those most likely to be without health insurance in the United States. Now, thanks to a provision of the new law (one that almost everyone likes), that’s changed.
Adult children can now stay covered under a parent’s health insurance plan until age 26, whether or not they’re enrolled in college, and even if they’re married. As a result, fewer young adults are going uninsured.
According to the US Department of Health and Human Services, “2.5 million more young people were insured in June 2011 than were insured in September 2010.” That’s nothing to sneeze at.
However, as reported by Kim Lankford at Kiplinger last week, this doesn’t mean that staying on Mom and Dad’s plan is always the best choice. It can sometimes be more expensive than buying coverage on your own, and if you live in another state your coverage levels may be severely restricted.
We explored some of the issues surrounding coverage of adult children in our recent survey of college students, recent grads, and parents. We found some interesting things:
- Only 31% of current college students reported that they were covered under a parent’s health insurance plan; that decreased to 22% for recent grads
- Recent grads were more likely to be covered under an employer-sponsored health insurance plan (32%)
- However, only 14% of recent grads and only 16% of students reported being uninsured
Intriguingly, when asked whether it’s better to live at home your first year after college and be able to afford health insurance, or to live on your own and go uninsured, a majority of both recent grads (68%) and current students (54%) said it was better to live with their parents and have health insurance.
We asked parents a couple questions too:
- Half of all parents (51%) said they planned to keep their children on their health insurance plan until age 26
- Parents with children under the age of 26 said that they’d be willing to pay $225 per month on average to keep their kids insured
To learn more about our survey results, read our recent press release for additional highlights and notes about survey methodology.