Editor’s note: For people buying on the individual market who want health insurance starting Jan. 1, the deadline to sign up is Monday, Dec. 23. We are running one post a day with questions and answers on the Affordable Care Act and Covered California until that deadline. Readers can also consult KQED’s Obamacare Guide, written specifically for Californians.
By Emily Bazar, CHCF Center for Health Reporting
Q: My youngest child is 21 and graduated from college in May. My other daughter is 24 and is still a college student in Stockton. What are my options with them under the Affordable Care Act?
A: The good news, Simona, is that your daughters may have several options and their coverage could fall into place easily.
Let’s cross our fingers and begin with “could fall into place easily.”
Starting in January, most Americans will be required to carry a minimum level of health insurance or pay a tax penalty. That includes your daughters and other young adults 18 and over.
One provision of Obamacare that already went into effect allows parents to keep their young-adult children on their insurance policies up to age 26.
“I suspect that’s the route that many college students are going to take,” says Steven Bloom, director of federal relations for the American Council on Education.
If that’s not an option, many universities offer health insurance that will meet Obamacare requirements, Bloom says.
But it could cost. My editor just received a bill for a semester’s worth of health coverage for his daughter, who attends Prescott College in Arizona: $767.
So, shop around because two major Obamacare-related changes coming in January could provide new, affordable options to young adults:
- Medi-Cal, public health insurance for low-income Californians, will broaden its eligibility requirements, raising the income threshold and opening the program to those who were previously ineligible, such as childless adults.
This could be promising because young adults often don’t work full time — whether they’re attending college or not — and may soon qualify.
Please note that if you claim your young-adult child as a tax dependent, your income will count toward your child’s income for Medi-Cal eligibility purposes, says Tony Cava of the state Department of Health Care Services.
The result? Your child may not qualify.
- Covered California, the state’s insurance marketplace, begins open enrollment in October sells a variety of health plans. To make those plans more affordable, it also will offer sliding-scale tax credits to Californians earning between 138 percent and 400 percent of the federal poverty level (click here for FPL guidelines).
Young adults, even those who have access to college health plans, can purchase a plan from Covered California instead. Students will be eligible for tax credits if their incomes fall within the guidelines.
But beware the dreaded tax caveat: For a student to be eligible for tax subsidies, no one can claim him or her as a dependent on tax returns.
To complicate matters further, the student won’t even qualify for the subsidies if he or she is merely eligible to be claimed as a dependent, says Anne Gonzales, a Covered California spokeswoman.
(One way around that: If you as a parent qualify for tax credits, you can add your young-adult child to a family plan and receive financial assistance for premiums that way, Gonzales notes.)
Whew. Now you know what I meant earlier by “Or not.”
Here’s one final option: Covered California will offer a low-cost catastrophic plan for young adults under 30 and for individuals who cannot find affordable health coverage. (Click here to learn more about what’s considered “affordable.”)
All costs (except for preventive care and the first three office visits each year) will be out-of-pocket until the $6,400 annual deductible is reached.
Q: What about my daughter who just graduated?
A: She will have many of the same options as college students. And if she lands a job, her new employer may offer coverage.
More campuses also may start allowing graduating students to remain on their health plan for a limited period, such as three to six months, Bloom says.
“Once that period is over,” he adds, “then former students, like all other Americans, are going to have to find health insurance.”