By Larry Avila, The Post-Crescent, Appleton, Wis.

Jan. 1–A new state law allowing young adults to remain on their parents’ health insurance plans until age 27 is being met with mixed reviews.

“Whether or not this is a good idea depends on your perspective,” said Sheila Jenkins, president of Network Health Plan, which is owned by Menasha-based Affinity Health System. “It’s a good way for some young individuals to get coverage, however, it does push health insurance costs up.”

The statute is effective today.

Adding more people to an employer’s insurance plan raises premium rates, she said.

Jenkins suspects the new state law may be more burdensome on small businesses.

“Large employers are not subject to these mandates because of their choice to be self-funded,” she said. “So really it’s disproportionately affecting small business, which may force some small employers to drop coverage altogether.”

Jenkins estimates the new mandate may, on average, raise a company’s premium costs about 1 percent.

The insurance change allows adults in Wisconsin, up to age 27, to remain on their parents’ health insurance plans unless they have access to cheaper plans through their employers.

Current law does not address how long a child can remain on their parents’ coverage, leaving it up to insurers to decide.

Supporters of increasing the age, including Gov. Jim Doyle and the Wisconsin Association of Health Plans, said the law will help young people who either can’t afford health insurance when they first start working or aren’t offered it.

There were no estimates from the state or the insurance industry as to how many people may be affected.

To qualify, the young adults have to be single, not eligible for insurance through their employer, or be able to get on their parents’ plan for less money than through their work.

About 20 states require insurance companies to offer parents coverage of adult children, according to the Council for Affordable Health Insurance.

Chris Hanson, president of Hanson Benefits in Kimberly, still is waiting for the dust to settle.

“How this truly will affect premium costs has yet to be seen,” she said. “Whenever you file a claim, it does take time for it all to catch up.”

Like Jenkins, Hanson believes higher premium costs are unavoidable.

“It will have an effect at some point,” Hanson said. “Whenever there’s new mandates, it just seems to create more upheaval.”

No one seems to know how much the changes will cost. Neither the state Office of the Insurance Commissioner nor the Wisconsin Association of Health Plans, which represents 18 member health plans across the state, has estimates.

“Every indication is that the mandates have increased costs and cost expectations will be higher for 2010,” said Phil Dougherty, senior executive officer of the Wisconsin Association of Health Plans.

The Associated Press contributed to this story.

—–

To see more of The Post-Crescent, or to subscribe to the newspaper, go to http://www.postcrescent.com.

Copyright (c) 2010, The Post-Crescent, Appleton, Wis.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

A service of YellowBrix, Inc.