The Right Prescription

A Slacking Figure

Another bogus Obamacare enrollment claim.

By 4.2.14

UPI
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Yesterday President Obama claimed that “more than 3 million young adults… have gained insurance under this law by staying on their family’s plan.”

Indeed, the number of young people who can now stay on their parents’ insurance plans until age 26 — the so-called “slacker mandate” — is one of the most oft-repeated Obamacare statistics. The Los Angeles Times used it in a recent article to claim that because of Obamacare “at least 9.5 million previously uninsured people have gained coverage.” That included not only the 3.1 million young adults who are covered by their parents’ plans but also about 2 million on the exchanges and 4.5 million on Medicaid.

The exchange and Medicaid numbers are highly problematic and have been challenged elsewhere. Yet the 3.1 million young adults figure seems nearly infallible. For example, when disputing the Medicaid numbers back in January, Ezra Klein claimed, “The 3.1 million young adults who got coverage through the new insurance regulations is a pretty reliable figure.”

Well, no, it’s not.

The 3.1 million figure comes from a June 2012 report from the Department of Health and Human Services. The slacker mandate went into effect in late September 2010. Using data from the Centers for Disease Control’s National Health Interview Survey, HHS estimated that the number of 19-25 year-olds with insurance was about 64.4 percent in the third quarter of 2010 and was 74.8 percent in the last quarter of 2011. HHS took that increase of 10.4 percent and multiplied it with the number of 19-25-year-olds in the U.S. in 2011 — about 29.7 million according to the Census Bureau — which yielded 3.1 million. (Note: The 29.7 million figure actually refers to the number of 18-24-year-olds in the U.S. in 2010. HHS apparently assumed there was that same number of 19-25-year-olds in the U.S. one year later in 2011.)

Looking at the actual data in the National Health Interview Survey shows some serious shortcomings of the HHS approach:

You’ll notice that the increase in the number of insured 19-25-year-olds came from both private insurance and public sources such as Medicaid. To get a more accurate assessment of young adults on their parents’ policies, the HHS should have restricted its calculation to the increase in private coverage, which was 9.5 percent. Multiplied against 29.7 million yields 2.8 million, not 3.1 million.

Still, 2.8 million is nothing to sneeze at. However, what’s curious is that HHS hasn’t updated its analysis since June 2012. The June 2012 analysis was an update from a December 2011 report that found 2.5 million 19-25-year-olds had gained coverage, which was itself an update on the 1 million figure from a September 2011 report.

A look at the most recent data on 19-25-year-olds from the National Health Interview Survey shows why HHS hasn’t released an update in over 21 months:

The number of insured 19-25-year-olds had declined by the third quarter of 2012. Private coverage had dropped by 2.1 percent. Multiply that against the roughly 30 million 19-25-year-olds in the U.S. in 2012, and the number of young people on their parents’ policies declined by about 600,000 to 2.2 million. Apparently the slacker mandate is losing its effectiveness.

There are other reasons to be suspicious of the 3.1 million figure. For starters, it doesn’t jibe with Census Bureau numbers. The Census Bureau shows that from 2009, the year before the slacker mandate began, to 2012 the number of uninsured 18-24-year-olds declined by about 976,000. But not all of those went onto their parents’ insurance. For that age group, Medicaid enrollment grew 271,000 and employer-based coverage increased 447,000 during that same period. That would mean that those newly insured by joining their parents’ coverage were at most 258,000.

The huge difference between the two surveys isn’t easy to explain. Undoubtedly part of the explanation is found in the fact the Census Bureau asks about insurance status only in its surveys from February to April while the National Health Interview Survey asks about it year round. Also contributing to the discrepancy is that neither survey specifically asks a young adult if he or she received coverage via their parents’ insurance.

That said, the biggest source of confusion is found in HHS’s methods. What HHS did amounts to little more than a “back of the envelope” calculation. To really get at how many young adults are newly covered under their parents’ policies would require surveys asking very detailed questions about the source of insurance. It would probably also require more sophisticated statistical analysis that could estimate the impact of the slacker mandate while controlling for other factors such as the economy and Medicaid enrollment. As it stands, all we have is an estimate of the number of young adults who gained coverage via their parents that is unreliable — far too unreliable for major newspapers to be repeating it. 

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About the Author

David Hogberg is a senior fellow at the National Center for Public Policy Research.  Follow David Hogberg on Twitter.