CALIFORNIA SAYS OUT WITH THE OLD: COVERING THE DISABLED

Volume 28, Issue 504 November 26, 2007

Matthew Gever

Young adults make up the fastest growing portion of the uninsured. A contributing factor has been that dependent children typically “age out” and are dropped from their parents’ insurance policies when they turn 19 years old.

In an effort to reverse that trend, a growing number of states have been enacting laws that require private insurers to treat young people as dependents for insurance purposes and to allow parents to keep their children on family policies beyond the age of 18. In Utah, insurers must offer coverage until the young person’s twenty-sixth birthday; in New Jersey, it’s the thirtieth.

Now California has enacted a law (AB 910) that promotes continued private health coverage for certain disabled adults. Like most states, California had a mandate (the 1975 Knox-Keene Act) that required insurers to continue covering dependents beyond the usual limiting age if they could not sustain themselves through employment because they were “mentally retarded or physically handicapped.”

Based on a model law written by the National Association of Insurance Commissioners, the old statute was “outmoded and ambiguous,” said Seth Weisbord, with the nonprofit United Disabled for Economic Security. Since the 1970s, experts have identified many developmental disabilities other than mental retardation or physical handicaps, such as autism spectrum disorders and mental illnesses. But under the old law, people with autism or other more newly identified disabilities did not qualify for continued private coverage. As a result, they often ended up in Medi-Cal—California’s Medicaid program.

AB 910 broadens the definition of persons who may qualify for continued private coverage to include dependents who are “incapable of self-sustaining employment by reason of a physically or mentally disabling injury, illness, or condition.” By enabling dependents to remain in their current plan, the new law helps to guarantee that the disabled will continue to obtain needed medical care from specialists, which they might have great difficulty doing in Medi-Cal.

Reasonable Notification

The new law also requires insurers to notify parents in writing of the option to continue care at least 90 days before the child ages out. “Most people are unaware of their current option to maintain their disabled child’s health care coverage after aging out,” said Assemblywoman Betty Karnette. “I am hopeful that creating this notification process will allow more parents in this situation to keep their child’s health-care coverage intact.” Under previous law, a parent who wanted to continue coverage past the typical “age out” date must have known they had that option and asked the insurance company to put it into effect.

The law also requires that after a change in carriers, that the new plan or insurer continue coverage of the dependent party.

Insurers were supportive of the bill. “AB 910 will provide greater access for health coverage for dependent adult children who are disabled, while ensuring that notification of such coverage is consistent across all health plans and insurers,” said Anne Eowan of the Association of California Life and Health Insurance Companies in a letter of support to the Assembly.

There are about six million to seven million children and adults in the United States who are unable to support themselves through work or are at great risk of being unable to do so because of severe disabilities, according to United Disabled for Economic Security. “Many other states still have statutes that like those that were on the books in California,” said Weisbord.

For more on state measures that mandate coverage for young adults, go to this NCSL Web page: www.ncsl.org/programs/health/dependentstatus.htm