Your Costs

What Young Adults Need to Know about Health Insurance

Summary

Under 30? Even if you’re healthy and hardly ever see a doctor, there may be good reasons to have health insurance. And the fact is that coverage now may be less expensive than a big medical bill later.

Why Health Insurance May Be Important

Skipping health insurance may seem like you’re saving money in the short run—especially if you’re young and healthy. No one plans on getting sick or hurt, but unexpected illnesses and accidents can happen. Just like car insurance or homeowner’s insurance, health insurance can protect you from the unexpected. The cost of getting care without health insurance can be more than you expect. For instance, an unforeseen hospital stay can cost you tens of thousands of dollars.

Plus, people with health insurance may be more likely to visit the doctor regularly for routine preventive care. Checkups and health screenings may uncover health problems before symptoms appear. This could potentially head off a major illness, which could be very expensive in the future. Some preventive services may be covered by your health plan at no cost to you.

Sources of Health Insurance

The good news is that there are many ways for you to get health insurance.

If you’re under 26. Under the Affordable Care Act, you can choose to stay on your parents’ health insurance plan until you turn 26. This means you can stay on your parents’ plan whether or not you:

Live with your parents;
Your parents claim you as a dependent on your taxes;
Have a full-time job;
Are eligible to enroll in your employer’s health plan;
Attend school; or
Are married.

You can find out how to get added to your parents’ plan here.

If you’re in college. Many colleges and universities offer their own form of health insurance to students. While the cost of school-sponsored plans can vary depending on the school, they’re often less expensive than health coverage you’d get on your own. School plans also can vary in terms of coverage options and networks, but they may be a good choice if you’re looking for affordability and an easy enrollment process. Check here for more information about student health plans.

If you’re employed. If you’re working and your employer offers health insurance, you may be able to enroll in your company’s plan. You’ll usually have the option of signing up when you get hired. If you don’t take that option, you may have to wait to sign up until your company’s once-a-year open enrollment period. But you may be eligible for a special enrollment period if you have a life event, like you get married or age out of your parents’ health plan in the past 60 days. You can find out more about how employer plans work here.

If you’re unemployed or your employer doesn’t offer health insurance. If you’re not currently working or if your employer doesn’t offer health insurance, the federal government and many states operate a Health Insurance Marketplace or Exchange. These are websites where you can buy health insurance. They offer one or more health plans from which you can choose.

If your income is under certain limits, you also may qualify for Medicaid or the Children’s Health Insurance Program (CHIP). Learn more about Medicaid Medicaid and CHIP here.

Choosing a Health Plan

Types of plans . Whatever way you’ve chosen to get health insurance, the variety of plan types from which to choose can be confusing. Many insurers offer different types of plans like a Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Point of Service Plan (POS) or Exclusive Provider Organization (EPO). With an HMO, for example, you get all of your care from doctors, hospitals and providers in your plan’s network. An HMO generally will not cover care outside that network except in an emergency. Each of these plans is structured differently and coverage and rules differ for each. Find out more about the different health plan types and how to choose the one that’s right for you here.

Cost sharing . Having health insurance can help protect you from the full cost of care. But it doesn’t mean you won’t have to pay anything out of pocket when you go to the doctor. Almost every plan involves some form of “cost sharing” like deductibles, copayments and coinsurance. This means your insurer pays for a portion of your care and you pay the rest. The amount you’ll have to pay depends on the type of plan you have and whether or not you use a provider who contracts with your network. Click here to learn more about types of costs you may have.

High-deductible health plans. As a healthy young adult, you may consider a high-deductible health plan. This type of plan offers lower premiums (the cost to maintain coverage), even if you have a high deductible (the amount you have to pay for care before your insurance starts to pay). If you have few anticipated medical needs, a high-deductible health plan may be a good option. It will cover you in case of an emergency and keep your overall costs low throughout the year.

In the Health Insurance Marketplace, health plans are grouped into five categories: Catastrophic, Bronze, Silver, Gold and Platinum. As someone under 30 who doesn’t expect to have high medical costs, you may consider a Bronze or Catastrophic plan. Both of these plans have lower monthly premiums but high deductibles and cost sharing. A catastrophic plan is a special type of plan for people under 30 and those with hardship exemptions.

More on Health Insurance

For more information on the basics of health insurance on the go, try our free mobile app, FH® Consumer Classroom. The app provides easy access to educational materials such as articles, videos, resource links, a glossary, a healthcare quality toolkit, newsletters and more. This information also is available on our website, fairhealthconsumer.org. You can download the app from the App Store or Google Play.

Your Action Plan: How to Get Health Insurance as a Young Adult

If you’re under 26, consider staying on your parents’ plan.
If you’re in college or employed, consider insurance from your college or employer.
If you’re unemployed or your employer doesn’t offer insurance, consider the Health Insurance Marketplace.
You can get to know the different types of health plans and cost-sharing arrangements.
Consider a high-deductible health plan.