| Sumario: | We study how health insurance eligibility affects financial distress for young adults using the Affordable Care Act's (ACA) dependent coverage mandate─the part of the ACA that requires private health insurance plans to cover individuals up to their 26th birthday. We examine the effects of both gaining and losing eligibility by exploiting the mandate's implementation in 2010 and its automatic disenrollment mechanism at age 26. Our estimates show that increasing access to health insurance lowers young adults' out‐of‐pocket medical expenditures and debt in third‐party collections. However, reductions in financial distress are transitory, as they diminish after an individual loses access to parental insurance when they age out of the mandate at age 26.
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