Governor proposes health coverage for adult children
Paterson says plan reduces uninsured without costing New York more money
ALBANY –New York would join a growing list of states permitting young adults as old as 29 to remain on their parents’ health insurance policies under a plan Gov. David A. Paterson will propose today during his first State of the State address in the Capitol.
The proposal reduces the number of uninsured New Yorkers by as many as 80,000 people but without costing the deficit-ridden state a dime. Whether it raises premiums on other policyholders, however, was something Paterson administration officials did not rule out.
The initiative — touted as good news in an otherwise dire period — requires health insurers that offer dependent-care coverage to extend the terms for the children of policyholders to age 29. Currently, most coverage for children by insurers in New York — there is no specific law covering the issue — ends at age 19, or 23 for those attending college full time.
Administration officials believe the initiative would cut monthly insurance costs for young adults from about $900 a month to as low as $240 monthly. Parents, or their children, would pay for the additional coverage. The extended coverage would be eligible only for unmarried children of private insurance holders.
“This gives families and young adults another option, an affordable option,” said Joseph Baker, Paterson’s deputy secretary for health and human services.
The proposal comes just four months after Paterson vetoed a less ambitious measure that passed the Senate and Assembly, providing short-term coverage for young adults between ages 19 and 26. One objection of Paterson to that measure was that it would have had a “detrimental impact” on two government health programs by steering healthy young adults into their parents’ policies — thereby raising the costs for those remaining in the government-backed programs.
The Paterson administration says the plan lowers the costs for young adults by basing their premiums on a younger and healthier age range — known as an “age band” — instead of being grouped in with older adults ages 29 to 65. Officials downplayed concerns, raised in other states, that it will encourage younger adults with serious illnesses to remain on their parents’ policies — thereby raising costs for other group premiums.
The governor is not expected to introduce much that is new today.
Typically, the annual address to the Legislature offers broad outlines of plans for upcoming budget presentations. But Paterson unveiled his budget in December, more than a month early, to give lawmakers more time to consider his program cuts and tax hikes to close a $15.4 billion deficit in the 2008 and 2009 fiscal years.
The governor is expected to again emphasize the depth of the state’s financial problems in the coming year while defending his plan to cut spending for school districts, hospitals and others that rely on state funding while raising taxes and fees by more than $4 billion.
Kenneth Adams, president of the Business Council of New York State, said his group will be looking to make sure the insurance plan does not raise costs for small businesses.
“It’s an interesting idea that’s worth pursuing,” he said.
Health insurers, meanwhile, say they are already facing big tax hikes in Paterson’s budget plan.
“We’re going to be real concerned if there’s anything in this proposal that would raise health care costs. Obviously, the governor’s budget proposes significant taxes and fees, and [our] concern is enough is enough,” said Jim Smith, a spokesman for the New York State Conference of BlueCross & BlueShield Plans.
The state has about 2.5 million uninsured people, with young adults representing nearly one-third of that amount.
The Commonwealth Fund, a private foundation based in Manhattan that promotes health policy reforms, reported last year that 53 percent of young adults age 19 to 29 had access to employer health insurance policies, compared with 74 percent of older workers. Those 18 and younger have uninsured rates of 12 percent, compared with 30 percent for those ages 19 to 29 once they leave their parents’ policies, the group said.
The foundation said that 20 states in the past several years have moved in the direction Paterson will propose today. New Jersey requires coverage up to age 30 — the nation’s oldest.
Insurance companies now offering dependent-care coverage would be mandated to extend the policies up to age 29. Those not offering such coverage would not face the new mandate.
Parents would not have to buy the additional coverage. For insurance companies, there could be profit motives under Paterson’s plan because it will drive more young adults to insurance pools. And such a population, for insurers, is cheaper to cover because of fewer illnesses than older consumers.
“It spreads the risk for them with a fairly large amount of revenue that they haven’t had before,” Dr. Jon Cohen, senior adviser to Paterson, said of the insurance companies.
One insurance trade group gave initial backing to the plan, though it cautioned that many details have not yet been revealed by the administration.
“This is a marketplace-driven solution,” said Leslie Moran, a spokeswoman for the New York Health Plan Association. She said the alternative — pushing younger adults into government- funded health programs — would end up raising premiums for others.
“It’s important to do this through the marketplace instead of government subsidies that rely on higher health care taxes,” Moran said.
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