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Can insuring adult kids hurt your credit?

Under new Obamacare rules, parents can keep their adult children insured till age 26, but they're not responsible for the deductibles.

By Aug 20, 2014 1:07PM
Cash and a stethoscope © Aslan Alphan/Getty Images

By Gerri Detweiler, MSN Money 

Some parents are now keeping their adult children on their health insurance plans thanks to the Affordable Care Act. That law requires healthcare plans that offer dependent coverage to make the coverage available until a child reaches the age of 26.

But just because parents are willing to pay for their kid's health insurance, it doesn't mean they want to pay for all their medical expenses. Yet, because the insurance policy is in their name, some parents are getting bills for their kids and are worried that if they don't take care of them, their credit is at risk.

For example, one of our readers wrote:

I have a 20-year-old son, who does not live with us, is not in college and does not have insurance through his employer. We have continued to keep his insurance coverage on our family policy, "just in case" something would happen. However, he has made three visits to the ER in 3 months for non-life threatening emergencies. I have asked him several times to call me first, or go to urgent care instead, but apparently he isn't listening.

Are my husband and I still responsible for the deductibles at these expensive visits? It just doesn't seem fair, that I am expected to pay these, if 1. I haven't authorized the visit/expense and 2. Am not even able to find out what was done. I hate to drop him, but can not keep paying high dollar medical bills for non-life-threatening issues.

We've written before that parents are usually responsible for their minor children's medical expenses, even if that child was in the custody of an ex-spouse at the time. We've also warned that under some state laws, spouses may be liable for their husbands' or wives' essential medical bills even if they didn't sign anything specifically agreeing to that responsibility.

But the medical bills of an adult child? That may be another matter, says attorney David L. Trueman. "Even though it is dependent coverage, it is separate coverage" (and the) "primary insured is not a guarantor," he says, unless they sign a form agreeing to be responsible for bills not covered by insurance.

In other words, just because you keep your adult children on your health insurance, that doesn't mean you will have to foot their medical bills.

Trueman also reminds patients to be sure they understand understand how their insurance works. "There are some contracts with in-network providers where they have agreed they will not bill the patient for unpaid expenses (besides co-pays or deductibles)," he explains.

Medical bills can have a significant impact on a consumer's credit reports and scores. According to a report by industry trade group ACA International, "health care related debt (from hospitals, physician groups and clinics) is the leading debt category, accounting for nearly 38 percent of all debt collected in the industry." And medical bills don’t typically appear on credit reports until they are sent to collections, so this type of reporting is almost always negative. While the newest version of FICO scores will treat medical bills differently, it may be a very long time before that scoring model is widely adopted by lenders.

In the meantime, Stephanie will want to reach out to the companies who are trying to collect from her. She can send them certified letters explaining that her son is an adult, and she is not financially responsible for his bills.

And like anyone who dealing with medical billing issues, she should check her credit reports (free from and monitor her credit scores on a regular basis. She can get a free, updated credit score each month at  If collection accounts do appear on her credit reports, she will want to dispute them right away.

But she’ll also want to have a heart-to-heart with her son and help him understand that he is legally responsible for these debts, and if he doesn’t pay them, he should expect to get collection calls. These unpaid bills could even land him in court if he is sued for the debt. At a minimum, he’ll be dealing with the repercussions on his credit for the next seven years or more. So he should monitor his credit as well.

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Drop the jerk son. Doesn't mind receiving her aid, but doesn't want to do it as she requests.
Aug 20, 2014 1:41PM
To avoid misunderstandings, I made it very clear to my kids as soon as they graduated college that they would be responsible for their own medical bills even if they continued on my insurance  . Those bills should be arriving in their son's name, not theirs, they can simply advise the  place of the correct address, their son's. The only things that should arrive is something from the insurance company should be an explanation of benefits, which is not a bill. This really is a no brainer, and they should communicate clearly with their son, that is their ONLY responsibility
Aug 21, 2014 3:18PM

If you are moved out and on your own, get your own damn insurance. How much could it cost for a 20 year old ?

Aug 20, 2014 11:29PM
It sounds good but it's doctors and hospitals that actually send out bills and turn items over to collection. If they think they can squeeze mom and dad for the bills, they will. It's virtually impossible to get negative collection accounts cleared up, even if they're incorrect. I suspect that this will be a bigger issue than most consumers realize.
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