Graduate Students, ACA Section 2714, and Medical Debt

Special guest post by Marissa Lawall 

Arguably the most popular provision of the Affordable Care Act (ACA), section 2714 (42 U.S.C. § 300gg-14) provides that individuals may stay on their parent’s insurance plan until they are twenty-six years of age. A 2013 Commonwealth Fund survey found 7.8 young adults gained new or better insurance through this ACA provision, and a repeat survey in 2016 found the uninsured rate for young adults, ages 19-34, dropped from 28% to 18%. On its face, it is difficult to find any harm caused by this provision. Healthy young people have insurance, despite continuing education or lack of gainful employment, and are presumably lowering costs by being in the risk pool. However, this provision can lead to unforeseen pitfalls, including medical debt, because of the way it interacts with the growing trend of increased cost sharing and narrow networks.  These trends acutely impact students in higher education, because students who study even a modest distance from their parents’ home are unlikely to have access to nearby “in-network” providers, and because students’ medical needs more often tend to come in the form of unexpected emergencies.  In this post, I will highlight my personal experience with Section 2714, as a graduate student, and explore policy and possibilities for reform.

An Emergency and a Choice: Applying Section 2714

Like many young adults, I remained on my parents’ insurance when I went to college. Specifically, I remained on my mom’s insurance because I was in law school and continue to be an advocate for the ACA program. But when my mom began a new job at a different hospital her insurance changed and so did the medical network. The only “in network” coverage was through the hospital that employed her, and that was hour and forty-five minutes away. I didn’t view this as an issue until the unexpected happened.

During a school sponsored flag football game, myself and another girl collided head to head, and I suffered a severe concussion. This was my third concussion and I knew I would need a battery of tests, including a CT scan.  Going to a hospital was a must, but my local hospitals were out of network. I called 2 local hospitals, to find out cost, and one hospital estimated a $2,400 bill and the other said it would be over a grand, but they could not definitively say; paying both of these bills would put me in severe debt. I ended up having to travel almost two hours to an in-network hospital before I could be treated.

I am a rare exception. Most individuals would have gone to the ER assuming it would be covered, only to get hit with a surprise bill; others may have chosen not to seek treatment, out of fear for bill. I was fortunate enough that I had enough appreciation of medical costs and my insurance plan; I was able to travel to see a “in network” physician and save myself from medical debt, but was met with burdensome travel and other miscellaneous expenses.

Addressing the Issues

If you are under twenty-six and attending undergraduate or graduate school you are limited in your healthcare options; you can stay on your parents’ plan, you can purchase insurance through the school, which is often costly, or pay the penalty. What does this mean realistically? If you are under twenty-six and have the options to stay on your parents’ plan, you don’t qualify for Medicaid. Further, if you want to apply for a plan in the market place it is likely you will not qualify for subsidies because your parents’ plan counts as minimum essential coverage so long as you are their dependent.  See 26 U.S.C. § 36B(c)(2)(B) (“coverage month” for purposes of tax credit eligibility does not include months in which taxpayer had available “minimum essential coverage”); 26 U.S.C. § 5000A(f)(1)(B) (“minimum essential coverage” includes available employer-sponsored coverage). Despite the limited coverage options, this issue is almost never discussed.

The healthcare.gov website is one of the only places where you can find information on what it means to stay on your parents’ insurance through the marketplace. Healthcare.gov suggests if your parents live in the same state of the school you are attending it is not as much of an issue because you can be included on your parents’ application, and the website gives slightly more detail for if you are applying for marketplace insurance out of state.   Regardless, you must state your parents’ income and are reliable for your own payments. But it gives no information regarding networks and private insurance.  And, as I noted above, I live in the same state as my parent and nonetheless encountered difficulty due to a narrow network.

Conclusion

It is difficult to criticize a popular component of the law that has created a lot of good. However, it is important individuals understand the boundaries before there is an emergency. From a policy perspective, for individuals who are stuck in this conundrum, where they have limited choices but to be on their parents’ plan, but are out-of-network, doctor’s visits and even emergencies take strategic planning. This would be easier with more transparency by insurers, more information given by state and federal agencies, and discussion between the individual and the parents on the policy they have chosen. If there is no transparency or understanding it can leave individuals under 26 without proper healthcare and/or in unimaginable debt. This cannot be proper policy, even for the young and healthy. There is no right answer now, but it is an issue that we should start discussing,

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