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Who Needs the 'Slacker Mandate?' UnitedHealth to Voluntarily Continue Under-26 Insurance Policies

June 11, 2012

By Avik Roy

There’s been a controversy within Republican circles as to whether or not the GOP should strive to preserve popular aspects of Obamacare if the Supreme Court strikes down the law. In particular, Capitol Hill Republicans wonder whether or not the GOP should preserve Obamacare’s "slacker mandate," which forces insurers to include adult children, up to the age of 26, in family coverage. But a federal mandate may not be necessary. On Sunday, UnitedHealth Group, the nation’s largest publicly-traded health insurer, announced that it would continue to include under-26 coverage in its family plans. Other insurers are likely to follow suit.

As I wrote last month, the "slacker mandate" has expanded coverage for some, by increasing the cost of health insurance by 1 to 3 percent, to the tune of $139 to $416 for the average family. As an important new study from Congress’ Joint Economic Committee notes, every 1 percent increase in the cost of health insurance decreases the number of insured by 200,000 to 300,000 in the United States. So the slacker mandate is great for upper-income Americans whose families already have insurance. It’s not so great for the unemployed and the self-employed, who face yet another barrier in the quest to find affordable insurance.

"The mandate would turn one of the health market’s few remaining natural incentives on its heads," the JEC notes, "discouraging young adults from purchasing insurance for themselves. Instead of mandating that health insurance plans include family coverage for adult children, policy should encourage all young adults to purchase an individual health plan that they can afford and keep throughout their lives."

Furthermore, Chris Jacobs notes that recent reports suggest that as many as 4 million "adult children" who are now on their parents’ plans had access to other forms of coverage.

So it’s great that UnitedHealth has taken the lead in saying that it will continue to voluntarily offer these family plans including under-26 coverage. United will also offer first-dollar coverage of certain types of preventive care, such as annual check-ups and screenings, along with maintaining the elimination of lifetime dollar coverage limits. United also promises that it will "not pursue rescissions of individual coverage except, as provided for in the [Affordable Care Act], in cases of fraud or intentional misrepresentation of a material fact."

"The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs," said UnitedHealth CEO Stephen Hemsley in a statement. "These provisions make sense for the people we serve and it is important to ensure they know these provisions will continue…These provisions are compatible with our mission and continue our operating practices."

It’s very likely that other insurers will move in the same direction. "I don’t think you can go back and say, ’You know the 26-year-old you have on your policy? They can’t be on there anymore,’" says Aetna CEO Mark Bertolini. "There are certain things that I would say are metastatic to the system already and not worth going back." Humana CEO Michael McCallister agrees: "I’m not sure anybody’s going to want to basically let all of that go away."

It’s not shocking that insurers would want to continue to write these policies. Covering young people, who rarely require health care, is good business for insurers. In a truly free market, where individuals buy health plans for themselves, such policies would succeed or fail based on the degree to which families believed that the extra coverage offered real financial value.

We don’t have that free market yet. But UnitedHealth’s leadership should encourage Congressional Republicans to seek voluntary, rather than coercive, solutions that bring more young people into our health care system.

Original Source: http://www.forbes.com/sites/aroy/2012/06/11/who-needs-the-slacker-mandate-unitedhealth-to-voluntarily-continue-under-26-insurance-policies/

 

 
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