Health Insurance for Young Adults: Health Capital and Aging Out

Introduction: Previous research has shown that compared with insured individuals, uninsured and underinsured individuals receive less care, have worse health outcomes, and receive a disproportionate amount of care for non-urgent conditions in the emergency department (ED) setting. In 2010, the dependent care expansion (DCE) allowed young adults up to age 26 to take up insurance under a parent’s employer-sponsored private plan. In this study, we track cohorts of young adults as they age into and out of DCE eligibility to study the effects of exposure to improved access to insurance through health capital accumulation, as may be evidenced by lower rates of inpatient and ED utilization. We also examine shifts in utilization patterns by payer as cohorts age out of DCE eligibility.

Methods: We used data from AHRQ Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID) and State Emergency Department Databases (SEDD) in 2008–2014 (36 States with inpatient data and 19 States with ED data). HCUP data were linked with American Community Survey (ACS) population data at the State level to derive utilization rates. Outcomes included utilization rates for nonmaternal encounters, behavioral health encounters, and encounters for ambulatory-care-sensitive conditions. We used a difference-in-differences approach to examine the impact of the DCE on hospital use, comparing cohorts of patients between the ages of 20 and 25 when the DCE went into effect against a comparison group of cohorts that were never eligible for the DCE. Several of the cohorts aged out of DCE eligibility during this timeframe and we examined changes in use by payer after age-out.

Results: Based on the difference-in-differences analysis, the rate of privately insured hospital visits rose 5.7% with DCE eligibility, but was associated with a 12.4% reduction relative to pre-DCE rates after aging out (no longer eligible through the DCE) (p<0.01). Uninsured hospital visits fell 7.4% with DCE eligibility and remained 3.8% lower than pre-DCE rates after aging out (p<0.01). Medicaid hospital visits fell 8.0% with DCE eligibility (p<0.01) but were unchanged compared to pre-DCE rates after aging out. As a sub-analysis we followed a cohort with temporarily improved insurance access who first aged in then aged out of the DCE and compared their all-payer (total) experience to a cohort never eligible for the DCE over the same period of time. After becoming ineligible for the DCE (aging in and then aging out) total nonmaternal hospitalizations decreased 6.0%, hospitalizations for ambulatory care sensitive conditions decreased 6.0% and nonmaternal ED visits declined 8.6% (all p<0.05) compared to a cohort never eligible for the DCE. ED visits for asthma, however, were unchanged.

Conclusion: Upon aging out of DCE eligibility, the mix of hospital services shifted away from private insurance, however uninsured visits and Medicaid visits rose, suggesting that private insurance was less available. All-payer results showed limited support for the health capital effect of improved access to insurance.