‘Act Your Age’ = ‘Make A Terrible Financial Decision’

As a streaming-only household, my partner and I receive targeted ads based on our browsing and viewing habits. Marketers have accurately placed us as squarely in our mid-20s, which means that roughly every other ad we get is for insurance.

Our least favorite of these ads: a Progressive campaign that orders viewers to “Act your age! Dump your parents’ insurance company!” The ad started in 2014, but we were shown it as recently as this spring while watching Hulu.

What Progressive impugns as immature is the tendency for millennials and Gen Z-ers to stay on their parents’ insurance as long as possible. Since 2010, the Affordable Care Act (aka Obamacare) has required every plan that offers dependent child care to extend that coverage until the child turns 26. In other words, almost anybody on their parents’ insurance has the right to stay there until they are solidly in adulthood, even if they get married, get a job with benefits or have their own child.

This provision is a popular one, with a majority of poll respondents in recent years saying they feel it is “very important” for it to remain in place, regardless of the fate of Obamacare (which faces constant legal challenges).

I’m no healthcare expert or economist, but this clause is probably so popular because of the high cost of healthcare and relative low wealth of my peer group.

Before government subsidies are factored in, the average benchmark premium for a 27-year-old in most states is $374 per month, or $4,488 per year. For context, the median salary of a 27-year-old is $35,225, meaning a non-subsidized healthcare plan would account for about 12.7 percent of their pre-tax income.

As even proponents of adult children leaving their parents’ health insurance note, “[t]here is no blanket statement that applies to all health plans.” One-size-fits-all approaches just don’t make sense for something that depends on so many different factors – age, size of family, overall health, the financial situations of adult children and their parents, etc. For myself and my partner, the math is clear: leaving our parents’ plans early would not be a “mature” financial decision.

Staying on our parents’ insurance until we’re 26 isn’t a sign of immaturity, it’s our legal right. And for us and millions of other Americans, it’s the best decision we could make. Maybe a better slogan would be “Act your age! Carefully evaluate all of your options, weigh the dozens of relevant factors, and discuss the situation with everyone involved before making a major financial decision!”