Obama and the Slacker Mandate

In his health care rally in the Philadelphia area earlier this week, President Obama touted a proposed regulation that insurance companies would have to allow children up to age 26 on their parents’ plans – i.e. a slacker mandate – designed to appeal to the college crowd.

I wonder however, if President Obama realized the Pennsylvania already has a slacker mandate (in fact, up to age 29); state lawmakers enacted it in 2008.

In testimony to both the state House and Senate Appropriations Committees in February, Pennsylvania Insurance Commissioner Joel Ario noted that very few young adults have been enrolled under the new mandate. Ario commented, as summarized by Pennsylvania Legislative Services (subscription), that:

  • The cost to insure young adults on their parents’ plan was about the same as if they bought their own plan.
  • “Low-risk” young adults would buy their own plan (or remain uninsured), leaving only high-risk cases looking to the slacker mandate–and insurers were naturally unwilling to give coverage to high-risk young adults as the same rates as children.
  • The failure of the slacker mandate to reduce the number of uninsured is “generally symptomatic of the greater healthcare problem.”

That sounds pretty close to what I wrote (in a commentary on the slacker mandate with Benjamen Ober) two years ago:

SB 1453 [the slacker mandate], however, ignores the primary reason why young adults often go without insurance—the high cost of coverage. This is especially true considering that most young adults use very little health care. …

Instead of more mandates, lawmakers should adopt reforms that allow individuals to purchase low-cost, mandate-lite insurance. Another alternative would be to allow individuals to opt out or waive certain coverage mandates to reduce the cost of their insurance. … The only way to substantially reduce the cost of health care is to put individuals in charge, not government bureaucrats. This means eliminating many of Pennsylvania’s costly health insurance mandates, not adding to them. Eliminating the burden of health care mandates will lower the cost of health care, provide more insurance to more individuals, and restore personal choice to citizens.