Insurance Matters: Young Adults
We exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions.
Paper from the American Economic Journal. Austin Frakt commentary.
Don’t worry though: ObamaCare insuring 30 million Americans won’t increase demand for health services. It’s all going to be just peachy.
It would be interesting to see over what period the percentage reductions in utilization occurred.
Those figures represent major reductions. Are these individuals not getting the care that they really need?
@Brian. In the ED? Unlikely. The vast majority of the decline is likely to have been unnecessary care.
And a 100% increase in the parents’ worry ratio!
Most young people believe they are bullet proof — and, for the most part they are. But if you’re the small percentage who have a problem, insurance matters. I once heard an insurance agent tell us that he gets calls all the time from college-age women who suddenly want to purchase health insurance the moment they discover they are pregnant.
95%+ of the women I have quoted individual health insurance for either were pregant or wanted to be and that was the sole reason for them shoping. When asked the majority also admitted they planned to drop coverage once they had the child.
I fine it hilarious the government thinks a small fine of a couple hundred dollars growing to $700 is going to convience these women to pay thousands of dollars a year for coverage they don’t need but they are now guaranteed to be able to purchase if they wait.
At least now women will occasionaly call before they are pregnant and buy coverage with the intent to use it. If I told them don’t bother wait until your 2-3 months along and save the money every one of them would take advantage of that.
Any individual mandate that does not include a penalty at least equal to if not greater then the cost of the premium avoided is worse then useless. It actually lays a foundation and road map for abuse of the system. PPACA is a how to manual for adverse selection.