Once you turn 26, you’ll need to get your own health plan, and one important decision young adults will need to make at some point is choosing the right health insurance. The world of healthcare coverage can seem very intimidating, but it’s an important step you’ll have to take.
This short summary will outline some health insurance options for young adults and offer advice on how to make informed choices that fit your specific circumstances. As you’re reviewing the options of insurance coverage, understanding the basics is key.
The Affordable Care Act (ACA) allows you to stay on your parent’s plan until you’re 26 years old, regardless of whether you get married, become a parent, attend school, or have access to employer-sponsored group coverage. It does not affect whether your parents claim you as a dependent on their taxes and living on your own should not impact your ability to stay on a parent’s plan either, as long as you’re under 26 years of age.
There are several health insurance options to consider for young adults under the age of 26:
- Parents’ plans: Many individuals in this age group can remain on their parents’ health insurance plan. This option often provides reliable coverage as you transition into adult life.
- Employee-sponsored plans (group health insurance): Some young adults may choose to enroll in employer-sponsored health insurance plan.
- Individual and family health plans: Available on the Healthcare Marketplace or directly through insurers, there are a variety of plans that fit specific needs and budgets. Marketplace plans do offer the opportunity to qualify for subsidiaries to help lower the cost of coverage.
- Medicaid: In some cases, this government health insurance program may be an option for individuals and families with limited income.
Health Insurance for Young Adults Over 26:
If you’re 26 years old or older, you are no longer eligible to stay enrolled on your parent’s plan, but you still have plenty other options for health coverage. Just as you did before you turned 26, you may be able to get health insurance through a group (employer-sponsored) plan, an individual/family plan on the marketplace, or a Medicaid type policy (if you’re eligible).
The benefits of young adults having health insurance is worth it. Even if you live a healthy lifestyle, having insurance helps you gain access to regular care when needed. And it is a safety net in case of an unexpected health emergency. Health coverage can you with provide peace of mind and help you plan financially. Since you’ll now likely be paying for your own coverage, you will have a better sense of the benefits and costs associated with your specific plan.
As you start to think about choosing a health insurance plan, it’s important to carefully review and compare. Normally, you get a 30-day enrollment period when you can sign up for your employer’s benefits, likely around the time you’re hired, but it can be different from job to job. Turning 26 is considered a qualifying life event and this allows you to enroll in Marketplace plan or group plan through your employer during a different time.
Start looking at plans before you turn 26. You’ll want to research your options and figure out which type of plan might work best for you. If you’re currently on your parents’ plan, but have a job, you’ll want to compare the benefits, the network, the premium, and out-of-pocket costs you’d get through your employer plan with the plans you might find on the health care Marketplace.
Consider things like:
- Network: A network is made up of doctors, other healthcare professionals, hospitals, and pharmacies that the insurance company contracts with to provide care. Typically, using “in-network” care providers results in lower out-of-pocket costs for you, So finding a plan with a network that meets your needs and that your current doctor is “in network” with is an important part of managing your healthcare costs.
- Premium: A plan premium is your monthly payment for health insurance coverage. Typically, the more coverage you have, the higher your premium will be.
- Out-of-pocket costs: Out-of-pocket costs include your plan deductible, coinsurance, and copays for care.
- Your income
- How healthy you are
- Your job status
- Whether you have kids
- Whether you are married
- Can I afford to pay for this plan every month or every year?
- Does this plan cover my (or my family’s) health needs?
When you sign up for health insurance focus on what you can afford, it’s important to consider your out-of-pocket costs. One big cost is the monthly premium. Another is the deductible. This is the amount you pay for covered health care services before your insurance kicks in. For example, if you pick a plan with a $3,000 yearly deductible, you will have to reach that $3,000 deductible before your plan helps pay for covered health care services you use. Generally, you will want to consider the plan with the lowest deductible and a premium you can comfortably afford. That means if you can afford to pay $200 a month and have a lower deductible like $2,000, go for it.
You will probably have LOTS of questions, and just as you think you understand your plan, it will likely change in some way. Always reach out with your questions. Your parents and/or family members are always a good starting point. If you have a group plan through your employer, your manager or HR department will be able to provide you some helpful hints as well.
