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The health reform law, which allows young adults to remain on their parents’ health insurance plans until they turn 26, will help give those young people the flexibility they need to pursue new educational and career opportunities, according to a new study published in the Journal of Health Economics. Researchers predict that will ultimately end up boosting their incomes by about four percent.

Obamacare and Young People

In order to reach those conclusions, researchers studied state-based laws that were in place before the Affordable Care Act — similar policies allowing young adults to remain on their parents’ plans even before the health law made that a national standard. The young people who were at least 18 years old when their state enacted that type of law saw a wage increase by about two percent on the earnings they made after the age of 22.

Why? Well, since those adult children didn’t have to worry about finding a way to get health insurance, they were free to make different decisions about their early careers. In some cases, their college tuition was cheaper because they no longer had to purchase a student health plan. In other cases, they were free to accept nontraditional jobs that didn’t offer insurance. Or they were more likely to go back to school in their early twenties because they didn’t need to work in order to have access to health benefits.

Significantly, the researchers found that these wage increases “largely persist” even after young adults turn 26 and no longer qualify for their parents’ plans. When attempting to extrapolate these findings to determine what they mean for Obamacare’s coverage expansion — which has the potential to have an even bigger impact, since it’s in effect for young people in every state — researchers concluded that young Americans will see “sustained” wage increases closer to four percent.

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Young adults used to have the highest uninsurance rate of any age group. But over the past several years, Obamacare has given millions of young adults access to health care, helping the uninsurance rate among Americans between the ages of 18 and 25 decline to just 19 percent.

This positive benefits of the health reform law will extend beyond young adults, too. Another recent study estimated that Obamacare will end up boosting the incomes of the poorest Americans by at least five percent, and the latest figures from the U.S. Department of Commerce’s Bureau of Economic Analysis find that the health law is already helping to raise people’s personal income and spending. And thanks to Obamacare’s new state-level marketplaces, which give Americans of all ages more workplace flexibility, people will be able to switch jobs more easily, start new businesses, and evenretire sooner.


Tara Culp-Ressler

White House Photo: Pete Souza