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The Consolidated Omnibus Reconciliation Act of 1985 (COBRA) contained provisions granting individuals the opportunity to continue employment-based insurance coverage following qualifying events which would otherwise cause the loss of coverage. In this paper, I examine the impact of COBRA coverage on young adult health insurance coverage following the loss of dependent status, a qualifying event. I use the 1984 to 1989 panels of the Survey of Income Program Participation in a difference-in-differences framework to provide the first estimates of COBRA’s impact on young adult insurance status. I find that individuals in the affected age group were 4.5 percentage points more likely to be insured following COBRA going into effect. This increase is largely due to gains in employer sponsored insurance – particularly as a dependent – and is robust to a variety of sensitivity checks. I find considerable heterogeneity by sex; insurance gains are concentrated among young men. These findings suggest that COBRA’s access to continued employer sponsored coverage after ageing out as a dependent reduced uninsurance among young adults.

The impact of the consolidated omnibus reconciliation act of 1985 on young adult health insurance coverage