Adulting is hard…what with learning how to do your taxes, trying to create a kickass résumé, attempting to understand the art of professional networking, and all the other tedious responsibilities that come with the “adult” job description. All of these things tend to be quite overwhelming for most people our age…so when it comes to understanding health insurance as a twenty-something, let me be your guiding light and hopefully make the transition to healthcare independence as easy as possible.
Disclaimer: I am not a doctor, insurance agent, or legal representative. All of the information I have researched and compiled for you came from reputable sources that have been linked for reference.
What Exactly is Health Insurance?
Adam Felman from MedicalNewsToday.com says, “Health insurance is a type of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses.” So essentially, health insurance is a preventive measure one takes prior to getting sick or injured in order to receive monetary assistance in footing their medical bills.
Health insurance is going to be your best friend and your worst enemy because while it’s a major drain on your bank account, it’s also there to help you when the tough gets going. It’s just one of those necessary evils in life.
Why Do You Need It?
As you know, nobody plans on getting sick or injured…so to help avoid having to pay those inevitably insane medical expenses alone, your health insurance will help soften the blow.
While it is not illegal to be uninsured, you may be required to pay an individual shared responsibility payment penalty for each month you go without insurance. If you make over X amount of money each year, you should expect to pay these fees during tax season. On that note, you may be eligible to wave this fee if make below a certain income during the year.
According to HealthCare.gov, in 2016, the fee for being uninsured was either 2.5% of your household income or $695 per person (whichever was higher.)
What is the Age Cap and What Does it Mean for You?
Under federal law, you are permitted to remain on your parents insurance until you turn 26―this is the maximum insurance-mooching age. Prior to your 26th birthday, it would be wise to start making plans regarding your healthcare, whether that be receiving coverage through your job or Medicaid or what have you…cause once that special birthday rolls around, you’re on your own, baby bird! It’s time to fly solo (according to the US government.)
What Types of Insurance Are There?
In general, health insurance can be categorized under either private and public. Private insurance is the most common type of insurance, with 65% of people under 65 years of age being insured by a privately-owned company. Public insurance programs are government-run and require the insured to pay a premium in exchange for receiving government aid. Some well-known public health insurance programs include Medicare, Medicaid, the Veteran’s Health Administration, and the Indian Health Service (source.)
If you don’t have a job lined up that offers insurance benefits, Medicaid may be a good option for you to check out.
What Plan Should You Use?
The type of insurance plan you choose is super important because it’ll be the determining factor for how much money you will be paying out-of-pocket at visits and which providers you are able to use.
For instance, an HMO (Health Maintenance Organization) tends to be the cheapest plan and will provide negotiated fees and a primary care physician through its policy. Whereas, a PPO (Preferred Provider Organization) may cost a bit more, but they allow the insured to use any doctor they’d like and gives them the opportunity to refer themselves to specialists, as opposed to needing to visit their primary physician for a referral.
To research more plans and pick the right one for you, be sure to check out this site.
What Costs Should You Expect?
Ahh money…that’s your main concern, am I right? You’re thinking, “will I be able to afford my premium?” “…and what the heck are deductibles and copays??” To these questions I say, fret not my dear! I’ve got you:
Your insurance premium will largely depend on which insurance company you choose. Your premium is the fixed amount you pay monthly to receive the insurance benefits. (Source)
A deductible is the minimum amount of money you must pay towards your healthcare services before your insurance plan will start paying their portion. (Source)
A copay is the set amount of money you pay for doctors’ visits after you have paid off your deductible. This amount may vary depending on what your appointment entails (drugs, lab work, etc.) Copays are also dependent upon how much the monthly premium is (lower premiums = higher copays, higher premiums = lower copays.) (Source)
Ex.) You pay $300/month for your premium and your deductible is set to $4,000. So once you have paid off the full amount of your deductible, your copay at your doctor’s appointment may only be about $20.
Make sure you check out the link under Helpful Resources to compare pricing between different insurance options that are available.
Below are some super informative websites I found while I was reading up on health insurance:
**Please be sure to do your own research, too. Although I tried my best to gather as much information for you as possible, these sites are not exhaustive and the Googleverse is just teeming with statistics on this topic. Also, be sure to read your state’s healthcare legislature for a better understanding of the laws in your area.
I must say, I feel super enlightened after doing the research I did for this post. I’ve just been going through the motions, blissfully ignorant about the topic of health insurance. I was kinda thinking all of this would just magically fall into place at some point, but, honestly, I’m so glad I started thinking about it now cause I only have about 6 months left until I turn 26 and I don’t want to end up SOL when April rolls around.
I hope you found this information as helpful as I did and if so, please make sure to share this post with all your friends and family who may benefit from it!
Are you interested in more posts like this? If you are, leave a comment telling me which topics you’d like to learn about.
Stay informed and make good choices!
Make sure to check out the Top 5 Best Jobs for Broke af College Students if you’re like me and need some extra cash to survive while you finish your degree. Also, don’t forget to sign up for The Weekly Tea newsletter in the side bar to receive blog updates!