26 and uninsured? 6 steps to your first health insurance plan
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Updated Aug. 26, 2019: There are major milestones we experience when we reach certain ages in life.
At 16 or 17, you can get your driver’s license.
At 18, you can register to vote.
At 21, you can buy alcohol.
And at 26, you need to get your own health insurance?
People still covered under their parents’ health insurance will be kicked off once they reach 26 years old.
Parents were previously allowed to keep their children on their health insurance plan until age 19 until the Affordable Care Act was passed in 2010, raising it to 26. If your 26th birthday is approaching, you’re now placed in the position of shopping for your own health insurance.
Navigating the landscape of plans, policies and premiums on your own may seem daunting. But going without coverage doesn’t have to be the outcome. Knowing what your options are — and how to narrow them down — can help direct you to a plan that covers your needs without breaking the bank.
Studies show that young adults between the ages of 18 to 34 are uninsured at almost double the rate of adults. Of this age group, nearly 13 million live without health insurance, according to Census data.
Regardless of age, going without insurance to save some money may seem like a possibility. We’re here to tell you that before shopping around, you should never go without some sort of health insurance coverage.
We asked two millennial money experts — Tonya Rapley of My Fab Finance and Chelsea Fagan of The Financial Diet — about the importance of having a health insurance policy. Both bloggers ensured that they secured health coverage when they aged out at 26:
The Affordable Care Act mandates that you must have health insurance coverage. But there's no penalty for going without insurance as of 2019.
Even without a tax penalty, skipping health insurance can have serious financial consequences. A hospital stay can cost thousands of dollars. Health insurance can help offset that cost and keep medical issues from ruining your finances.
At 26, you may have already have mountains of student loan debt to pay off, or, early in your career, may not have the option to receive job-sponsored health benefits.
But just because you’re under 30 doesn’t mean you’re immune to getting sick or injred. You’ll need some kind of minimal catastrophic health coverage in the event something terrible happens to you.These are some of your options:
Open enrollment for the federal Health Insurance Marketplace is from Nov. 1 until Dec. 15, 2019. Open enrollment rules vary from state to state, so make sure you take advantage of the various options available to you.
If you miss the deadline for Obamacare, you can still sign up for coverage under a special enrollment period around the time of your 26th birthday. It buys you some more time, allowing you to take advantage of open enrollment both 60 days before and after your 26th birthday.
Another alternative for finding healthcare coverage after turning 26 is to apply for Medicaid, a state-based program for those who fall below a certain income level.Read our state-by-state guide to Medicaid to see whether you qualify in your state.
Depending on your income, you may also qualify for help in the form of subsidies to pay for plans on the health insurance marketplace. These come in two forms and are based on your income:
Premium tax credits to help lower your premium
Cost-sharing reductions to lower expenses like copays, deductibles, coinsurance costs and out-of-pocket limits
You may qualify for any of these subsidies if you fall below 400% of the federal poverty level. Learn more about these subsidies.
Turning 26 may exclude you from remaining on your parents’ health coverage, but not from other plans that don’t take age into account. If you’re still in school or have returned to college to earn a degree, investigate signing up for a college-sponsored plan while you’re enrolled in classes. Already graduated? Many colleges and universities offer health insurance plans through their respective alumni associations.
Freelancers and the self-employed need health insurance, too. Get to know your industry and the resources offered to you. Is there a freelancers union or trade organization you can join that offers health coverage to its members? You may be able to obtain insurance from temp agencies, chambers of commerce, or small business owner groups. You can even opt for an off-exchange plan through the federal marketplace.
Doing so could cost you money and give you unacceptable coverage. Whether browsing the Obamacare marketplace, selecting a private insurance policy, or going an alternative route, keep in mind some of these tips:
What type of plan are you looking for? What type of deductible do you want? Do you prefer a large in-network selection of doctors? Examine, compare and contrast plans carefully to see which ones contain features and benefits you’re looking for.
Consider how often you’ll use your plan. Even if you’re healthy at 26 and rarely go to the doctor, think about the cost and price tradeoff. If you intend on using your plan frequently, it might benefit you to pay an overall higher insurance premium in exchange for a lower deductible limit you can reach more quickly. But if you’re a rare sight at the doctor’s office, a plan with high deductible and lower premium plan could be the way to go.
Build your budget. Determine how much you’d ideally like to limit your spending on monthly or annual premium costs or copay expenses. When looking at plans, note the in-network and out-of-network costs, and weigh your deductibles against your premiums to make sure that you won’t end up paying more for your insurance than you’ll be using it. And look into opening a dedicated health or flexible savings account to offset medical expenses not covered by your insurance policy.
Searching for insurance isn’t something you should do overnight. Unfortunately, turning 26 does happen overnight, and suddenly, the comfort of being under family coverage is gone.
Taking the time to anticipate this change well in advance can prevent you from missing a beat and being uninsured in the event a medical emergency arises. With the right coverage, you’ll save money, stay protected, and become more informed for making better insurance policy choices into your 30s, 40s and beyond.
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