Bill aims to expand dependent health coverage to age 30

By Erich Wagner

People between 25 and 29 would be able to hang onto their parents’ health insurance policies under legislation sponsored by Baltimore County Sen. Jim Brochin, a Democrat.

But business and insurance company witnesses told the Senate Finance Committee such an expansion might cause insurers to raise rates and employers to cut coverage.

Brochin’s bill would require insurers in the individual and group markets to extend the age for child dependents’ eligibility for health insurance to 30. The proposed bill exempts the small group market for companies with 50 or fewer employees.

A fiscal analyst estimated that the bill would cost the state $3.8 million starting next year and $24 million by fiscal 2015, as medical costs increase and eligibility grows.

Brochin, an insurance broker, disputed these estimates at Wednesday’s hearing. He acknowledged that many high-cost patients could join insurance rolls soon after the change took effect. However, he said  people in their late 20s are generally very healthy.

Brochin believes that costs would “easily” even out as the pool of insured grows.

Ron Wineholt, vice president of government affairs for the Maryland Chamber of Commerce, said that his organization had no objections to the increase in the age of dependent eligibility to 25 years old, as the General Assembly approved in 2007. Raising the age to 30 would go too far, Wineholt said, and would likely increase employers’ insurance premiums.

“We just think the claims would be coming, the spending would increase, and prices will go up for employers,” he said. “There is no requirement that employers cover dependents, nor subsidize the cost of caring for dependents. And to the extent you make it more costly for employers to cover dependents, you could well see employers back off that coverage as well.”

Before 2007, children could stay on their parents’ insurance plans until age 19, or in the case of full-time college students, age 23. The 2007 law allowed dependents to be insured until age 25, student or not.

Lynn Albizo, executive director for the National Alliance for Mental Illness in Maryland, asked lawmakers to compare the cost of insuring people aged 25 to 30 with the cost of hospitalizing people who are uninsured.

“The state is going to pay one way or another,” Albizo said. “Hospitalization, incarceration and all of that is much more expensive to the state than expanding insurance coverage.”

Kimberly Robinson, a lobbyist for the League of Life and Health Insurers of Maryland, said that in New Jersey, which has enacted similar legislation, parents are required to pay the extra premium costs to cover their children aged 25 to 30. Some senators expressed interest in amending the bill to more closely mirror the New Jersey legislation.

Brochin said he thought the amendment was a bad idea, and that he does not want to see his bill “carved up.”

“I think the opposition doesn’t understand how insurance is sold,” Brochin said. “When you have a family policy, it doesn’t cost any more until seven kids. Insurance policies cover you up to seven kids.”

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