Add your parents to your health insurance plan? California says maybe.
To be eligible, parents would have to meet the IRS definition of a dependent, meaning they rely on their children for at least 50% of their support.
Adults could add dependent parents to health plans under proposed California legislation Including dependent children on insurance policies has long been standard procedure in the health care industry. Controversial legislation being considered in California, however, would flip the script by allowing adult children to add dependent parents to their plans.
A proposal from Assemblyman Miguel Santiago passed its first committee hearing this week. If it becomes law, California would be the only state that allows this, according to the state Department of Insurance. Supporters, including Insurance Commissioner Ricardo Lara, say it will save families money by, among other things, limiting their expenses to one shared out-of-pocket maximum limit.
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“When we were young, our parents were there for us and took care of us,” Lara said. “Now we can take care of them when they need it the most.”
However, business groups say adding lots of older people to their large group insurance plans will just drive up their already skyrocketing premium costs. Employer premiums would increase between $200 million and $800 million per year, depending on how many people sign up. The result, they say, would be higher health care costs for everyone.
“If passed, the bill will likely increase health care access for Americans, which is always a huge positive,” says Sina Chehrazi, CEO and co-founder of Nayya. “But It’s hard to predict the impact in terms of costs for employers and premiums. However, what this does show us is that there is still a huge gap in terms of how American workers are choosing the right health plans for themselves and/or their families. If this bill was passed, we need to give our workforce the tools and guidance they need to understand the costs and benefits associated with these type of changes – so they can protect themselves against rising costs.”
To be eligible, parents would have to meet the IRS definition of a dependent, meaning they rely on their children for at least 50% of their support.
Supporters have framed the bill as a way to increase coverage among the state’s uninsured population, which is made up mostly of people who are living in the country illegally and are not eligible for government-funded insurance programs such as Medicaid and Medicare. Those people also aren’t eligible for federal assistance to purchase private coverage through Covered California, the state’s health insurance exchange.
But it’s not clear how many parents would join their kids’ insurance plans if they had the option. An analysis by the California Health Benefits Review Program estimates between 20,000 and 80,000 parents would do so. Another risk for employers would be parents who live outside the United States moving to the country to live with their children to get coverage.
“The opportunity to receive care in the U.S. would be very attractive, especially for those with high-risk conditions,” the analysis said.
Lara’s office dismissed that concern, saying “this is always an argument that is raised whenever we expand health-care options.” Since 2016, California’s Medicaid program has covered children living in the United States illegally. The state has not seen a corresponding increase in immigrants coming to the state.
“The reality is that expanding health-care choices helps Californians, pure and simple,” Lara’s office wrote in an email to The Associated Press. “The existing requirement in state law that someone ‘live, work and reside’ in California would apply.”
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