The Health Insurance Benefit as Umbilical Cord

--By Anna Shepherd, Health & Personal Finance Professional
We are all aware now that Obamacare has had some positive benefits for the less-than-27 years of age crowd: young adults can stay on their parent's health plan up to age 26. (Read more: http://www.sacbee.com/2010/05/09/2736160/personal-finance-health-care-rules.html#ixzz13b68jp7V )

As someone who is no longer on their parent’s plan, I have mixed feelings about this part of the legislation. It would be much easier to get back on Dad’s health plan, and I would certainly have a greater sense of security as I strike out on my own. But at the same time, as I’m trying to find a dentist for cheap in my new locale, I’m learning a lot and being selective because my bank account is at the forefront of my mind.

Part of the problem with American healthcare is that the true costs are not reflected in the prices (premiums) people pay due to the tax benefits of employer plans as well as the individual idea that “I’m not paying for it, the insurance company is.” I think these types of inclusions in the health care law further exacerbate that type of thinking. It allows young people to sort of write-off an expense onto their parents and not to have to think about the true costs until they smack them in the face later on. Now, people can certainly debate the pros and cons of young people not having to worry about their health care. As the linked article states, they are freer to find work, particularly non-profit social work, because health care coverage doesn’t have to be a prerequisite for a job. However, this also allows them to not have to think critically about planning their health and finances on their own.

Furthermore, we must ask, who is paying for this? The answer is often going to be: companies already cash-strapped and trying to cut costs in their health-plans. This is certainly not the best news for them, especially in this economic climate. These adult-children are not working for the company and increasing output and thus revenue, but they are reaping a reward for the work of others.

In the end, this is another example of inefficient cost-redistribution endemic in our health care system. Unfortunately, I view it as forestalling the inevitable—these kids have to own up sometime, whether it happens at 23, 29 or 35 god-forbid, the bottom line is always there and someone’s going to have to pay for it.