Labor Market and Insurance Coverage Impacts Due to "Aging Out" of the Young Adult Provision

Heather Dahlen, University of Minnesota

The Young Adult Provision of the Affordable Care Act (ACA) expanded coverage to millions of individuals between the ages of 19 and 26. The provision has increased coverage rates and relaxed the tie between employment and insurance, or job lock, for young adults. Since individuals become ineligible to remain on a parent’s insurance when they turn 26, this provision provides a natural threshold that leads to variation in characteristics of the marginally ineligible young adult.This paper utilizes the young adult eligibility threshold (age 26) to compare coverage and employment outcomes under a regression discontinuity (RD) design. Findings include increased rates of labor force participation, full-time employment, uninsurance, and unemployment, and decreased rates of unemployment and private insurance. The effects are slightly stronger for males than females.