Abstract
This article examines the effects of the health insurance coverage mandate for dependents on household financial portfolio decisions by focusing on the Affordable Care Act (ACA) of 2010. The act allows young adults to remain on their parents’ health insurance plans until their 26th birthday. Using the Survey of Income and Program Participation data, the author finds that the ACA dependent coverage mandate significantly increased the share of stocks by 4.2 percentage points for households having both parental employer-sponsored health insurance and dependent children aged 19-25 years. The mediation analysis suggests that the ACA mandate had a positive effect on shares of stocks through reduction in medical expenditures. However, the mandate had no significant effect on reduction in shares of bonds or assets in interest-bearing accounts.
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