California Issues for Adults to Add Dad and mom to Well being Plans
California could be the only state where adult children can include their parents as dependents in their health insurance plans. This insurance proposal aims to increase coverage for low-income people who live in the country illegally and who are not eligible for government-funded insurance.
Former President Barack Obama’s health bill allowed parents to keep their adult children on their health plans until they were at least 26 years old. This change helped millions of young people transition into adulthood as there were few jobs after the great recession. This change was so popular that many states went further and kept their children until they were 30.
Now California could do the same for older people retiring after the pandemic. A proposal in state legislation drafted by MP Miguel Santiago passed its first hearing in the committee on Tuesday. If it does become law, the only state that will allow it is California, according to the State Department of Insurance.
Supporters, including Insurance Commissioner Ricardo Lara, say they will save families money by, among other things, limiting their spending to a common maximum out of pocket.
“When we were young, our parents were there for us and took care of us,” said Lara. “Now we can take care of you when you need it most.”
But corporate groups say adding many older people to their large group insurance plans will only increase their already skyrocketing premium costs. Employer premiums would rise between $ 200 million and $ 800 million a year depending on how many people sign up. The result, it is said, would be higher healthcare costs for everyone.
“(This bill) will exacerbate the issue of health care affordability and strain difficult budgets for small employers at a time when they are finally recovering,” said Preston Young, a political supporter for the California Chamber of Commerce.
The bill would not be an open invitation for parents to abandon their health insurance plans to join their children. To be eligible, parents would need to meet the Internal Revenue Service’s definition of dependent, which means they depend on their children for at least 50% of their support.
However, some Democrats are concerned that the increased costs for employers and their workers could ultimately prevent them from passing away. Rep. Jim Wood, a Santa Rosa Democrat and chairman of the congregation’s health committee, voted for the bill on Tuesday but said it was “torn.”
“I think the bill will likely improve access to health care and potentially provide affordable coverage options,” he said. “However, I think there may be more work to be done here to see what the cost increase means for employers and ultimately for employees.”
Supporters have formulated the bill as a way to increase health coverage among the state’s uninsured population, composed mostly of people living illegally in the country who are not eligible for government-funded insurance programs like Medicaid and Medicare. These individuals are also not eligible for government assistance to purchase private coverage through Covered California, the state health insurance exchange.
However, it is not clear how many parents would join their children’s insurance plans if given the option. An analysis by the California Health Benefits Review Program estimates that between 20,000 and 80,000 parents would do this.
It’s hard to predict, as later this year lawmakers could extend state Medicaid benefits to adults 65 and older who are illegally residing in the country. In this case, many families may prefer that their parents choose this option rather than join their health insurance plans as it would not cost them anything.
Another risk for employers would be parents who live outside the United States and move into the country to live and get coverage with their children.
“The possibility of being cared for in the US would be very attractive, especially for people at high risk,” the analysis said.
Lara’s office dismissed this concern, saying, “This is always an argument that is made whenever we expand healthcare capabilities.” As of 2016, California’s Medicaid program has covered children living illegally in the United States. The state has not seen a corresponding increase in immigrants coming into the state.
“The reality is that expanding healthcare choices is simply helping Californians,” Lara’s office wrote in an email to The Associated Press. “The state law requirement that someone ‘live, work, and reside’ in California would apply.”