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California to Let Kids Add Dependent Parents to Family Health Policies

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What You Need to Know

  • Assembly Bill 570 will let adult children add parents and stepparents who are dependents to individual and family coverage.
  • The new law is set to take effect in 2023.
  • The law contains no age limitations, no requirements for parents who are eligible for Medicare to stick with Medicare, and no special provisions for dependent parents who have catastrophic health problems.

California has a new law that could help some older adults, including adults 65 or older, get ordinary family major medical insurance.

The law, created by California Assembly Bill 570, will let adult children with individual or family major medical insurance add parents or stepparents who are dependents to their coverage.

The California Department of Insurance drew attention to the new law in an announcement about new laws set to take effect this year.

Open enrollment for the parent dependent coverage is set to start in November. The first parent dependent coverage sold would come to life in 2023.

What Assembly Bill 570 Means

The California Health Benefits Review Program has predicted that adult children in California might use the new law to cover 20,000 to 80,000 parents and stepparents.

The families who use the option could get welcome help with simplifying their family health coverage arrangements and paying for the coverage.

California regulates health insurance companies and managed care companies separately.

If adult children use the new law to cover high numbers of parents who have high health costs, the law could increase health coverage providers’ claim costs.

For dependent parents who are about to turn 65, or who are already 65, using the new law to sign up for commercial coverage could complicate efforts to enroll in Medicare.

Law Details

The law makes the dependent parent coverage access option to parents and stepparents who qualify as the children’s dependents under federal law.

That means the adult children have to be providing at least half of the dependent parent or dependent stepparent’s support.

More on this topic

The law requires health insurers and Covered California, the state’s public health insurance exchange, to refer families with dependent parents who are enrolled in Medicare, or who are eligible for Medicare, to a Medicare advisor with California’s state-run patient advocacy program, but the law does not include any provisions to keep those Medicare-eligible parents from signing up for commercial major medical insurance.

The law includes no age limitations for dependent parents enrolling in commercial coverage, and it includes no mechanisms for handling the medical bills of dependent parents who have cancer, need an organ transplant or have other expensive health problems.

Coverage Providers’ Reaction

The California Association of Health Plans has said that it has questions about how the parent dependent coverage requirement will be implemented and believes it will drive up the cost of health coverage.

The Association of California Life and Health Insurance Companies originally opposed the requirement but moved to a neutral position after lawmakers exempted group health coverage providers from the requirement and made other changes.

Medicare and Parent Dependent Coverage

Adult children who think coverage for people under 65 is better or cheaper than Medicare coverage, or who simply want everyone in the house on the same plan, might see the new parent dependent coverage as the better option.

Bonnie Burns, a consultant with California Health Advocates, who helps train California’s senior patient health advocates, says one concern is that adult children could get confused about the Medicare Part B application process.

People who turn 65 get a onetime, six-month Medicare Part B open enrollment period.

People who sign up for commercial coverage, without signing up for Medicare Part B at all, could end up facing premium penalties and enrollment delays when they want to get Medicare Part B coverage, Burns says.

That’s why patient advocates insisted that insurers and exchanges should tell the adult children to talk to Medicare advisors before adding parent dependents to individual or family coverage, Burns says.

An aerial view of San Francisco. (Photo: Jason Doiy/ALM)