Uninsurance Among Young Adults Continues To Decline, Particularly In Medicaid Expansion States

Young adults (ages 19–25) were one of the first groups to gain expanded health insurance options under the Affordable Care (ACA). Numerous studies have found that the provision allowing adults up to age twenty-six to remain as dependents on a parent’s private insurance plan reduced uninsurance among young adults by the end of 2011. ^1–3 This study examines more recent changes in insurance for young adults and finds that their uninsurance rate fell from over 30 percent in 2009 to 19 percent in the second quarter of 2014 ( Exhibit 1 ).

SOURCE Authors’ analysis of 2009–14 data from the National Health Interview Survey. NOTES Uninsurance is at the time of the survey. Coverage definitions reflect those used in the early release file for the 2014 survey (see Note  5 in text). The figure reflects point estimates for the available calendar quarters (Q1–Q4) in each year. Linear interpolation is used between quarters.

The dependent coverage expansion began in September 2010 and targeted young adults who had parents with private coverage. In 2014 additional ACA provisions, particularly the Medicaid expansion and the availability of federal subsidies to purchase coverage in state and federal Marketplaces, increased access to affordable health insurance for other young adults. ⁴

We found that the dependent coverage expansion disproportionately affected coverage among higher-income young adults. In contrast, the coverage provisions implemented in 2014 were associated with substantial reductions in uninsurance among young adults with low and moderate incomes, particularly in states that expanded Medicaid under the ACA.

Study Data And Methods

We used data from the National Health Interview Survey (NHIS), conducted by the Census Bureau for the National Center for Health Statistics, to examine health insurance for young adults (ages 19–25) from 2009 to 2014. Data for only the first two quarters of 2014 were available through the “early release” program. ⁵

The early release files have several limitations. In particular, the insurance coverage categories are limited to public, private, and uninsured. Thus, we could not further distinguish coverage sources in 2014. In addition, income is measured at the family level, and the family does not necessarily correspond to a health insurance eligibility unit. For example, young adults living with their parents would have family incomes that reflected their own and their parents’ income. However, their eligibility for Medicaid or premium subsidies would be based on their own income if their parents did not claim them as dependents. This may lead to measurement error in identifying eligibility for various programs. Finally, the income measure was missing for approximately 10 percent of the sample and had not yet been imputed.

For consistency with the 2014 data, we used the family unit for measuring income relative to the federal poverty level for 2009–13. We excluded people who had only imputed income information for those years, because the imputed information was not yet available for 2014.

Insurance coverage was measured at the time of the survey in all years. For 2009–13 we assigned each person to at least one coverage category (public, private, or uninsured) using the definitions in the 2014 NHIS. A small number of people were covered by both public and private plans. Thus, the three coverage categories may sum to more than 100 percent. More measurement error is likely when assessing the type of coverage versus the presence or absence of any coverage, especially as the ACA increasingly blurs the line between public and private coverage.

We examined young adult coverage by family income from 2009 to early 2014. The period 2010–13 should capture the effects of the dependent coverage expansion, and the effects of the ACA Medicaid expansion and new Marketplace subsidies should begin to emerge in 2014. However, we did not attempt to isolate the effects of these policies from other changes occurring during this period, including the economic recovery.

When we compared previous years to 2014 estimates, which used pooled data from the first two quarters, we limited our analysis of data from the previous years to the first two quarters as well. We explored differences between states that did and did not opt into the 2014 Medicaid expansion by October 31, 2013. ⁶ Finally, we examined the characteristics of the young adults who remained uninsured in early 2014.

Study Results

The uninsurance rate for young adults fell from over 30 percent in 2009 to 19 percent in the second quarter of 2014, as noted above ( Exhibit 1 ). There was a large drop in uninsurance beginning in late 2010 and continuing through late 2011 and another drop in early 2014. Adults in older age groups (ages 26–44 and 45–64) had relatively stable uninsurance rates from 2009 to 2013, with declines in early 2014. By the second quarter of 2014 the uninsurance rate for young adults was no different than that for adults ages 26–44.

Between 2010 and 2013, when the dependent coverage expansion was in place but the Medicaid and Marketplace expansions had yet to be implemented, moderate-income young adults (those with family incomes of 139–400 percent of poverty) saw a drop in uninsurance from 37.0 percent to 26.4 percent ( Exhibit 2 ). High-income young adults (those with family incomes greater than 400 percent of poverty) saw a drop from 15.7 percent to 6.1 percent.

SOURCE Authors’ analysis of data from the first and second quarters of 2010–14 from the National Health Interview Survey. NOTES Insurance is at the time of the survey. Coverage definitions reflect those used in the early release file for the 2014 survey (see Note  5 in text). Family income is the income of an individual or a group of two or more related people living together in the same housing unit; the “family” does not necessarily correspond to a health insurance eligibility unit. Low income is up to 138 percent of poverty; moderate income is 139–400 percent of poverty; and high income is more than 400 percent of poverty. Levels in 2013 were significantly different from levels in 2010 ( $p<0.05$ ) for moderate income, private and uninsured, and for high income, private and uninsured. Levels in 2014 were significantly different from levels in 2013 ( $p<0.05$ ) for low income, public and uninsured, and for moderate income, uninsured. Some of the bars slightly exceed 100 percent because a small number of people were covered by both public and private insurance.

Although the percentage-point change was similar, high-income young adults experienced a larger relative decline (61 percent), compared to those with moderate incomes (29 percent). ⁷ The coverage gains for both groups came primarily from increases in private coverage, which may reflect the effects of the dependent coverage expansion as well as those of the economic recovery. The share of moderate-income young adults who were working increased between 2010 and 2013. However, there was no significant change in employment for young adults with high incomes. ⁸ Young adults with low incomes (family incomes of up to 138 percent of poverty) saw no significant change in coverage between 2010 and 2013.

Following the 2014 Medicaid expansion and first Marketplace open enrollment period, low-income young adults saw a decline in uninsurance from 39.6 percent to 30.7 percent between 2013 and early 2014 ( Exhibit 2 ). Uninsurance in the same period fell from 26.4 percent to 19.6 percent among young adults with moderate incomes. Young adults with the highest incomes saw no significant change in uninsurance during this period.

In states expanding Medicaid under the ACA, between 2013 and 2014 the share of low-income young adults who had public coverage increased from 29.9 percent to 41.1 percent, and the share of those young adults who were uninsured fell from 34.5 percent to 24.3 percent ( Exhibit 3 ). Somewhat surprisingly, the drop in uninsurance among moderate-income young adults—from 28.3 percent to 16.4 percent—was associated with an increase in public coverage from 13.0 percent to 21.8 percent and with no significant change in private coverage. This may reflect measurement error in our income categories or in reported coverage type, as described above.

SOURCE Authors’ analysis of data from the first and second quarters of 2013 and 2014 from the National Health Interview Survey. NOTES Insurance is at the time of the survey. Coverage definitions reflect those used in the early release file for the 2014 survey (see Note  5 in text). “Family income” is defined in the notes to Exhibit 2 . For a list of the states that had opted into the 2014 Medicaid expansion as of October 31, 2013, see Note  6 in text. Low income is up to 138 percent of poverty, and moderate income is 139–400 percent of poverty. Levels in 2014 were significantly different from levels in 2013 ( $p<0.05$ ) for expansion states, public and uninsured (both income levels). Some of the bars slightly exceed 100 percent because a small number of people were covered by both public and private insurance.

Public coverage increases in nonexpansion states may occur when people already eligible for Medicaid become enrolled after seeking coverage in the Marketplace. The fact that those with incomes of 100–138 percent of poverty are eligible for subsidized private coverage in these states may result in some private coverage gains for low-income young adults as well.

In nonexpansion states, the apparent increases between 2013 and 2014 in the shares of low-income young adults who had public coverage and those who had private coverage were not significant. However, the corresponding decline in uninsurance, from 46.2 percent to 37.7 percent, was marginally significant ( $p<0.10$ ). Those with moderate incomes saw no significant changes in coverage in nonexpansion states between 2013 and 2014.

Of the roughly six million young adults who remained uninsured in early 2014, 19 percent reported that they had never had health insurance coverage, and another 29 percent reported being uninsured for more than three years ( Exhibit 4 ). There may be measurement error in these estimates, especially for the share who reported never having coverage, since that requires recollection of coverage in childhood. Nonetheless, it seems clear that about half of uninsured young adults have been without coverage for an extended time.

SOURCE Authors’ analysis of data from the first and second quarters of 2014 from the National Health Interview Survey. NOTES Uninsurance is at the time of the survey. Coverage definitions reflect those used in the early release file for the 2014 survey (see Note  5 in text).

The moniker “young invincibles” has often been used to describe uninsured young adults—a term suggesting that their youth and health may protect them from the consequences of being uninsured. But in 2014, 17.1 percent of uninsured young adults reported having an unmet need due to cost, compared to 3.2 percent of insured young adults ( Exhibit 5 ). In addition, only 34.7 percent of the uninsured had a usual source of care, compared to 81.9 percent of the insured. And although 68.2 percent of the uninsured said they were in excellent or very good health, that figure was 77.8 percent for the insured.

Discussion

The uninsurance rate for young adults fell 11 percentage points between the first quarter of 2009 and the second quarter of 2014. Our findings suggest that the dependent coverage expansion reduced uninsurance among young adults with high and moderate incomes, with disproportionate effects for those with high incomes and no significant reduction in uninsurance for those with low incomes. In contrast, those with low and moderate incomes benefited from the 2014 coverage provisions, especially in states that expanded Medicaid under the ACA, while high-income young adults did not see further reductions in uninsurance. We cannot attribute all of these coverage gains to the ACA. Nonetheless, our findings do highlight substantial progress in reducing uninsurance among young adults since the implementation of the act’s coverage provisions.

Despite this progress, several factors likely contribute to the fact that approximately 20 percent of young adults remained uninsured in early 2014. First, young adults may not make having health insurance a high priority and may perceive the available coverage as unaffordable, likely because of their good health, risk preferences, and limited incomes. Moreover, uninsured young adults who have been without coverage for more than three years or who do not have a usual source of care may have limited interactions with the health system and therefore lack opportunities to learn about coverage options. Finally, some uninsured young adults are ineligible for financial assistance with coverage because of their immigration status and thus are likely to remain uninsured.

Importantly, however, these estimates reflect coverage only through the second quarter of 2014. More recent evidence suggests that uninsurance rates have continued to fall for all nonelderly adults. ⁹ In addition, about 10 percent of plan selections in the 2015 Marketplace open enrollment period have been by adults ages 18–25. ¹⁰ As awareness of new coverage options grows and the Marketplaces mature, the ACA may continue to build on its early success for this population.

Roughly half of uninsured young adults had family incomes up to 138 percent of poverty and therefore have the potential to benefit from the ACA Medicaid expansion. In states that have chosen to expand Medicaid, additional outreach may increase participation and further reduce uninsurance rates among low-income young adults. In nonexpansion states, affordable coverage may be out of reach for many of the low-income young adults who remain uninsured. Subsidized Marketplace coverage has the potential to benefit the remaining uninsured among young adults with moderate incomes. Lastly, penalties for not having insurance may encourage some reluctant young adults to obtain coverage, especially as awareness of these penalties increases and the level of penalties rises over time.

ACKNOWLEDGMENTS

This work was funded by the Robert Wood Johnson Foundation. The authors thank Patricia Barnes and the staff at the Research Data Center of the National Center for Health Statistics for their help with this study. The findings and conclusions in this article are those of the authors and do not necessarily represent the views of the Research Data Center; the National Center for Health Statistics; the Centers for Disease Control and Prevention; or the Urban Institute, its trustees, or its funders.

NOTES

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• 7 The 95 percent confidence intervals for young adults in the high-income and moderate-income groups are 46.6, 75.0 and 19.9, 37.2, respectively.
• 8 Authors’ analysis of 2010 and 2013 National Health Interview Survey data.
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