OWH: Age hike lets parents breathe

Paul Hammel, Omaha World Herald
September 6, 2009

SCHUYLER, Neb. — Carol and Russ Reha found themselves staring down the barrel of a health care dilemma that faces many families.

One of their twin sons, Cole, is a student at the University of Nebraska Medical Center in Omaha. He requires daily medication to control chronic asthma symptoms.

It's one reason he is pursuing a career as a physician, possibly as an allergist, said his mother, a nurse for the Schuyler Public Schools.

Under existing state law, parents can keep dependent children on their health policy — but only if they are full-time students and only through age 23. Cole will be 24 in February.

With his pre-existing condition, Carol Reha said, private insurers were unwilling to offer him an individual policy.

So it looked like the family would have to turn to an expensive, government-created insurance plan.

The options were COBRA, the federal program that allows those who lose their job or coverage to continue insurance for 18 months, or CHIP, a state program providing coverage for high-risk individuals who cannot obtain insurance in the private market.

Reha and her husband, who works at a local auto dealership, said it was going to cost $1,000 a month to maintain health insurance for Cole as he continued with his full-time studies.

But a bill passed by the Nebraska Legislature in the spring will help the Rehas and other families with unemployed or not-yet employed young adults.

The measure (Legislative Bill 551) raised the maximum age — to 30 — for keeping dependent children covered on health insurance policies. The change affects children regardless of whether they are full-time students.

The law, which takes effect Jan. 1, was passed on a 45-0 vote with the blessing of the insurance industry.

It's part of a national trend in which states are allowing parents to continue insuring their children as they complete their studies, struggle with unemployment or take jobs that don't include health insurance.

State Sen. Tom White of Omaha introduced the bill at the urging of his wife, Barb, a lawyer with insurance experience, who told him that the measure could fill a gap in health care coverage.

An estimated 75,000 Nebraskans under age 30 do not have health insurance, according to White's office.

White acknowledged that LB 551 doesn't help everyone, including Nebraskans whose health insurance is either via a federal program or through private self-funded plans utilized by large companies.

But he said the bill will help many families keep a child on the insurance rolls.

“There's a lot of incremental things we can do to really improve coverage for everybody,” White said.

Iowa lawmakers in 2008 passed a similar hike in the maximum age, to 25. The increase was done in part to keep young adults off the Medicaid rolls and thus avoid increasing the cost of that government-paid insurance program for the poor.

As of January, 18 states had allowed parents to insure children to at least age 25. Nebraska joined Florida and New Jersey in allowing insurance until age 30.

“It's a good law. It's needed, and it's going to serve folks well,” said Ann Frohman, director of the Nebraska Department of Insurance.

The insurance industry likes such laws because they can translate into more business. Keeping healthy young people on the rolls can balance out risks with older policy holders who are more likely to require care.

Jan McKenzie, a lobbyist for the Nebraska Insurance Federation, said young adults often choose to bypass insurance.

“They assume nothing is going to happen to them,” McKenzie said.

A lot of first-time jobs don't include health insurance, she said, and some college graduates are out of work or have been laid off, leaving them without coverage.

“One horrible car accident, if you don't have insurance, can pretty much wipe out a family,” McKenzie said, calling the new measure “common sense.”

She said the bill addresses one of the fundamental problems with the nation's health care system — too many people without insurance coverage.

That ends up raising premiums for those who are covered, she said, when hospitals and clinics cannot obtain payment for charity care for the uninsured.

McKenzie said that while LB 551 offers an option for families, some young adults may find it cheaper to buy an individual insurance policy than to stay on their parents' plan.

For the Rehas, they say the new law should offer a less-expensive option for insuring their son while he completes medical school. Cole's twin brother, Craig, is completing his pharmacy studies at the NU Medical Center.

Carol Reha said everyone knows someone who's been denied coverage for a pre-existing condition. The family was pleased to learn that the Legislature had passed White's bill.

“I'm glad they recognized that families have needs,” Carol Reha said.