Although recent efforts to consolidate the rules and regulations that govern the American health insurance industry have leaped forward with the passage of the Affordable Care Act in 2009, health insurance remains complicated and expensive. In the absence of an overarching national framework for insurance coverage, the packaging and sale of health insurance is typically administered at the state level. Depending upon the laws in a given state, health insurance providers may be permitted to levy certain surcharges or impose certain limitations on high-risk patients. Providers may also be permitted to raise their rates on an annual basis or make certain other unpopular financial decisions that might circumscribe or deny coverage for some individuals.
The Affordable Care Act has standardized some health insurance provisions. For instance, insurers are no longer permitted to deny coverage to prospective policyholders due to their pre-existing health profile. Previously, many providers had refused to cover people who suffered from diabetes, heart disease and chronic disabilities. This is now illegal.
Another key benchmark that has been put in place by the Affordable Care Act concerns the ability of teenagers and young adults to remain on their parents' health insurance policies regardless of their status as tax dependents. Under the new healthcare law, young adults under the age of 26 may remain on their parents' health insurance policies. Eligibility for this privilege is governed strictly by the covered person's age. There are no income, residency or employment requirements. Even a 25-year-old who makes $100,000 per year as a computer scientist can remain on his or her parents' insurance policy.
While this privilege is now enshrined as an immutable right of every American, it comes with a drawback: cost. Many insurance companies charge additional fees to provide "double coverage" for the adult children of covered parents. This can easily add $150 to $300 to the total cost of the pertinent insurance policy.
It's also important to note that this privilege sets the minimum length of time for which an American child must remain eligible for inclusion on his or her parents' health insurance policy. Some states have rules that are even more generous than those to which the federal government adheres. For instance, New Jersey permits qualifying young adults under the age of 30 to remain on their parents' insurance policies. The insurance companies that do business in such states are required by the federal government to adhere to these local laws.