Recent graduates in need of health care safety net in light of multiple reforms

As the class of 2012 exits Westwood, diplomas in hand, it enters the employment hunt in earnest.

Unfortunately for those Bruins, today’s job market is not promising. Fewer jobs are available, and those that are attract more well-qualified applicants than before. And with many recent UCLA graduates carrying steep student loans, there are serious consequences if employment is not secured.

But one under-discussed consequence of today’s poor job market is the limitation it puts on graduates’ ability to secure adequate health insurance.

Under healthy employment circumstances, a recent college graduate would be able to find an acceptable job with a decent wage without much difficulty, a job that would then help the graduate secure their first health insurance plan.

Considering ongoing economic malaise, which has pushed underemployment and unemployment for graduates under 25 to more than 50 percent nationwide, according to a study by Drexel University and the Economic Policy Institute, recent graduates are in need of a meaningful health care safety net.

But under the Obama administration and Congress’ Affordable Care Act, recent graduates may be afforded an extended safety net in which parents may keep college graduates on their family health plan, at least for a few years longer than most insurance companies previously allowed. Under the aptly titled “26 Provision,” children can now retain their family’s health insurance until they turn 26 years old.

Previously, insurance companies privately chose the age at which children would no longer be eligible for their parents’ plans ““ some cut off at 21 years old, others at 22. But the Affordable Care Act’s provision would require all insurance companies to adopt a single, and longer, period of eligibility.

Though this demographic statistically needs less health insurance, recent graduates ““ like all Americans ““ need to plan for medical emergencies, which the “Dependents to Age 26 Provision” allows students struggling in the job market to create.

Kathryn Savage, a 2011 graduate from UCLA, has a private insurance policy, which her mother created for her when Savage was only 5 years old.

While she is covered by her insurance, Savage said she realizes she is in a very unusual situation and counts herself lucky to be in her situation because it may be the exception for many postgraduates.

But the merit in the 26 Provision’s new standards is not found in reduced insurance costs, but rather in its capacity to ensure that recent graduates have access to health care as they search for work.

However, the 26 Provision ““ as well as the Affordable Care Act ““ is being challenged in federal court.

The Supreme Court is set to rule in the coming weeks on the constitutionality of the Affordable Care Act’s individual mandate, a requirement that all United States citizens purchase health insurance.

If the court declares the mandate unconstitutional, the entire act and its various provisions ““ including the 26 Provision ““ might be dismissed as well.

Adam Winkler, professor of constitutional law at UCLA’s School of Law, said the real issue is whether the individual mandate can be severed from the rest of the Affordable Care Act.

Essentially, can the Affordable Care Act exist without the revenue generated by the individual mandate?

If the Affordable Care Act is declared unconstitutional, other means of instantiating the 26 Provision must be found. However, Congress is unlikely to be that means.

“Washington is so dysfunctional right now, this kind of reform would have better luck at the state level than the federal level,” Winkler said.

To that end, the California legislature is contemplating a reform package similar to that in Massachusetts (whose health laws inspired the Affordable Care Act). However, the California legislature would have a difficult time getting this kind of provision implemented.

California’s voters are historically unwilling to increase taxes to raise revenues to pay for new programs, without these taxes the legislature will be hard-pressed to fund a California version of the 26 Provision. Luckily, there is a third avenue.

Allison Hoffman, a professor of health law at the School of Law, said insurance companies are talking about privately retaining some provisions ““ including the 26 Provision ““ even if the whole Affordable Care Act is overruled.

The incentive for health insurance companies to raise the eligibility age would be to create lifelong clients, Hoffman said. By providing coverage for recent graduates, a young, healthy population will become familiar with the insurance company’s products, effectively hooking them into the system.

Hoffman’s rationale shows that private companies are undertaking health care reforms of their own accord. Although these companies’ motives may not be altruistic, the crucial point is that reform can come despite political intransigence.

The Supreme Court is on the verge of issuing a landmark ruling on the future of health care law. But it seems help will come no matter how the judicial winds blow.

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