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How Does California Health Insurance Stack Up To The Patient Protection and Affordable Care Act?

How Does California Health Insurance Stack Up To The Patient Protection and Affordable Care Act?

California - Perhaps the intent behind the Patient Protection and Affordable Care Act (ACA) was to insure one of the groups most likely to be deprived of health care, but the result is somewhat unexpected.

As a group, youth in transition from dependent children to becoming independent working young adults have a difficult time making financial ends meet. One of the outcomes is that almost a third of adults between the ages of 19 and 25 (that's over a million people) lack health insurance.

A national group organized to work on behalf of such young adults, known as the Young Invincibles, claims that as many as three-fourths of young working adults are not eligible for group health insurance on the job. Still, parents were not allowed to cover children on their own health plans before the ACA became law.

Since first jobs are typically entry-level positions with salaries on the low end, health insurance had to take a back seat to college tuition, books, transportation, etc. The problem was directly addressed in the ACA, though. The new law allowed children to be covered under parents' health plans until children became 26.

Health Insurance In California Runs Into A Glitch In The Tax Laws

In California, insurance plans can include children under the age of 26 on parents' policies now, but state laws may be causing unintended consequences. As 2011 dawned, there was a surge among parents to enroll their children who had no other form of health plan. The excitement has been dwindling as more parents see an increase in taxable income when group coverage from employers is expanded to add youth until they turn 26.

In contrast, federal law exempts such benefits from taxable income, but the tax law in California, perhaps like in many other states, does not. California legislation AB 36 would change the state code to mirror the federal tax rules, but will it ever become law?

Similar legislation was defeated just a year ago and California's budgetary woes aren't looking any better in 2011. In this time of rampant budgetary cuts, how likely is it that a change in the tax code that could strip $92 million from the budget will become law anytime soon?

California Insurance Plans Offer Another Tactic To Cover Young Adults

Until group coverage irons this out, parents may have a better option. In California, insurance offers coverage specifically tailored for young and healthy adults under age 30. It's known as the Tonik plan. Underwriting, which determines whether to insure individuals based on the state of their health, only accepts people in good health, so this option is not for people with pre-existing conditions.

Premiums can be as low as $79 for healthy, young adults depending on where they live and Tonik has three deductible options that can be used to keep premiums low. Like all health insurance for California after the passage of health care reform, these plans exempt recommended preventive services from the deductible as well as from co-insurance or co-payment charges.

How Does California Health Insurance Handle Pre-existing Conditions In Youth?

Health care reform still does not block insurance companies from denying coverage to children over age 18 if they have a pre-existing condition. What if your child doesn't pass medical underwriting requirements?

If health care reform is allowed to continue, insurers will no longer be allowed to deny health insurance in California to adults over the age of 18 based on pre-existing conditions in 2014.

With some uncertainty still circulating around health care reform and how California enacts it, parents need to look at all of their options. That includes new coverage ideas like Tonik in the individual California insurance market.