The Slacker Mandate

It's been called the "slacker" mandate.

That's the provision in the federal Patient Protection and Affordable Care Act that states that insurance providers must provide dependent coverage even if the children are married and/or financially independent. It raises questions as to when a "child" becomes an independent adult.

Starting Sept. 23, parents have the option to keep their children on their plans up to age 26.

Michigan Governor Jennifer Granholm touted the extension of dependents' coverage in her radio address last week saying: "Also, in this tough economy, it's difficult for many young people to afford health insurance.  So now, insurers and employers who provide dependent coverage are required to make that coverage available at their next open enrollment period to children up to age 26."

Antony Davies, an associate professor of economics at Duquesnse University, said the argument on insuring 25-year-olds has some holes in it.

"Proponents of the regulation to keep 25 year olds on their parents' insurance policies claim contradictory things. On the one hand, they claim that keeping 25 year olds on the parents' insurance won't raise insurance costs. On the other hand, they claim that we need this new law because insurance is too expensive for many 25 year olds to purchase.

"If insurance is expensive for 25 year olds, then forcing insurance companies to keep 25 year olds on their parents' insurance will most certainly cause the parents' rates to rise. If, on the other hand, insurance rates won't rise when the government forces insurance companies to keep the 25 year olds on, then it must be the case that insurance for 25 year olds is not expensive."

Michael Tanner, senior fellow at the Cato Institute, said the employers are balking at covering the cost of the dependents. He said it costs a parent about $3,380 per child to keep their child on their policy.

"It's not a freebie," Tanner said.

Parents are more likely to keep their adult children on their policies if their children are not healthy, Tanner said. That will lead to higher costs for everyone as the healthier children will not be included in the cost-sharing.

There are 1.2 million people age 19 to 25 uninsured, according to the Kaiser Family Foundation.

"This is not a particularly expensive age group to cover," said Jennifer Tolbert, the principal policy analyst at the Kaiser Family Foundation. "This is a relatively inexpensive group to insure."

Tolbert said once the mandate that every American have health insurance kicks in 2014, the idea that mostly the unhealthy adult children on their parent's policy will drive up costs "won't be as much of an issue."