No Change In Proportion Of Young Adults With Health Coverage Since 2008
It has been one of Democrats' favorite talking points: that thanks to Obamacare's mandate that family-based insurance coverage cover "adult children" aged 18 to 26, "an additional 3 million young adults have gained coverage." There's only one problem. That figure is based on a misleading and superficial study by the Obama administration. According to data from the U.S. Census Bureau, the proportion of young adults with private health coverage was 60.5 percent in 2012—exactly the same proportion that had private coverage in 2008.
Background on the ‘slacker mandate'
Let's step back for a moment and talk about the background behind the Obamacare claim. Section 1001 of the Affordable Care Act demands that insurers offering family coverage "shall continue to make such coverage available for an adult child until the child turns 26 years of age."
In June 2012, a member of the Obama administration named Benjamin Sommers put out a press release claiming that, as a result of the mandate, the "number of young adults gaining insurance due to the Affordable Care Act now tops 3 million."
Sommers justified this estimate using figures from the National Health Insurance Survey from the Centers for Disease Control. The NHIS survey, among other things, breaks down the percentage of U.S. residents with private coverage, public (i.e., government) coverage, and no coverage. Sommers wrote that "from September 2010 to December 2011, the percentage of adults 19 to 25 with insurance coverage increased from 64.4% to 74.8%, which translates into over 3 million additional young adults with coverage."
Glaring flaws in the Obama administration's analysis
There are a number of glaring flaws with Sommers' calculation. First off, he doesn't distinguish between growth in private coverage vs. public coverage; the under-26 mandate only applies to private coverage. In addition, not every young adult with private coverage is in a family plan where the mandate applies. That is to say, if you're between 18 and 26 with private single coverage that you've purchased on your own, or obtained from your employer, the under-26 mandate isn't relevant.
Second, he assumes that the entirety of the growth in coverage is due to Obamacare. This is highly unlikely. As you can see from the below chart, if you look at the NHIS data over a longer period of time—say, from 1997 to 2013—there's a big dip in the percentage of young adults with private coverage in 2009 and 2010, corresponding to the worst depths of the Great Recession.
Sommers cherry-picked the 2010 baseline that would make his comparisons as flattering as possible. He compared the third quarter of that year, when 49.8 percent had private coverage, with the fourth quarter of 2011, when 58.8 percent did. The full-year averages for 2010 and 2011 were 51.0 and 56.2 percent, respectively; for the first 9 months of 2013, the proportion with private coverage was 58.1 percent.
If you simply use 2008 as your baseline—before the effects of the recession—you still get a positive effect, but a much smaller one. In 2008, the proportion of young adults with private coverage was 55.8 percent; if you assume the entirety of the change in private coverage from 2008 to 2013 is due to Obamacare, you get a coverage expansion of between 869,000 (on a 2008 population base) and approximately 1.04 million (on a 2013 population base). That's not nothing, but it's 2 million less than what the Obama administration is claiming.
Census data: 60.5% of young adults had private coverage in 2008 and 2012
But there's a third problem. It's far from clear that the NHIS survey is accurate. A much larger survey—this one from the U.S. Census Bureau—indicates that the net proportion of young adults with private health coverage is unchanged since 2008.
The NHIS survey—the one that Sommers cites—uses data from roughly 75,000 to 80,000 individuals of all ages. The Census survey, called the Current Population Survey or CPS, is more than three times larger; the CPS uses a sample of around 100,000 households, or around 250,000 individuals.
As you can see from the below chart, the Census' numbers are somewhat different from those of the Centers for Disease Control. In particular, the Census data indicates a far smaller spike in uninsured young adults during the Great Recession. (One minor caveat is that the Census survey breaks out the 18-24 age group instead of the 19-25 group.) You'll also notice that the Census survey is less noisy than the CDC data—an indication that it is likely to be more accurate.
Using Sommers' preferred baseline of 2010, the proportion of young adults with private health coverage has increased by 2.1 percentage points, from 58.4 percent to 60.5 percent. Hence, between 2012 and 2010, according to the Census, the number of young adults with private health coverage increased by between 626,000 (on a 2010 population base) and 630,000 (on a 2012 population base).
And if you use the 2008 baseline, as I noted up above, the proportion of young adults with private coverage is, on a net basis, unchanged. It was 60.5 percent in 2008, and 60.5 percent in 2012.
Most generous estimate from Census data: 931,000
I'm a nice guy, or so I like to think. And there is a way to look at this data that is at least moderately flattering to Obamacare. It's to compare the trend in 18-24 year olds with the trend in 25-34 year olds. Since 2008, according to the Census, the proportion of 25-34 year olds with private health coverage has declined by 3.1 percent: from 64.9 percent in 2008 to 61.8 percent in 2012.
If you give Obamacare credit for the entire difference in the trend between 25-34 year olds and 18-24 year-olds, since 2008, you get to a coverage expansion of between 889,000 young adults (on a 2008 population base) and 931,000 (on a 2012 population base). Again, that's not nothing, but it's far from the 3 million cited by Obamacare partisans.
By the way, the ‘slacker mandate' costs $160-480 for every other family
There's another point to bring up. Obamacare's under-26 mandate isn't free. It's a great deal for those families with "children" aged 18-25 who don't have their own coverage elsewhere. But it's a bad deal for pretty much everyone else with family coverage, because every family that doesn't have children in that age range will pay higher premiums in order to subsidize the cost of adding these individuals to the insurance pool.
As my colleague Bruce Japsen has noted, insurance analysts estimate that the under-26 mandate increases the cost of family-based insurance for everyone else by 1 to 3 percent. The average family plan in 2014 costs more than $16,000, meaning that the under-26 mandate is the equivalent of a $160 to $480 annual tax on families without adult children.
The media should stop uncritically regurgitating White House figures
What's the lesson from all of this? That the media needs to stop uncritically repeating the Obama administration numbers, which give Obamacare's "slacker mandate" credit for things it has nothing to do with: namely, growth in government health care, and the broader recovery from the Great Recession. Importantly, talking about the mandate's effects on coverage for young adults ignores the higher premiums paid by everyone else as a result.
Based on the best evidence we have, the under-26 mandate is responsible for at most around 930,000 newly covered individuals. In all likelihood, the real figure is smaller than that. What we do know is that there is no real evidence for the 3 million figure, and any credible reporter who says otherwise is being snookered by the White House.
This piece originally appeared in Forbes
This piece originally appeared in Forbes