What Young Adults Need to Know about Getting and Maintaining Insurance
Why Do I Need Insurance?
For young adults, health insurance is something easily overlooked because for most of us, this is the period in our lives when we are at our healthiest and have been lucky enough to not have major health challenges. Many times young adults may not immediately see the value of spending their (many times limited) money on health insurance premiums and fail to consider health insurance a priority. While this is understandable, too often, these periods of good health may not last and many of us will experience an unforeseen diagnosis, illness or accident that may lead to major medical debt.
Beginning on January 1, 2014, the Affordable Care Act requires that every individual obtain minimum essential coverage for themselves or pay a penalty. This includes children, young adults and seniors. The law has built in an increasing penalty amount each year beyond 2014, and requires that you pay for each month you are uninsured, beyond 3 months, in each calendar year. So not only is health insurance a smart decision for your own financial well-being, it is also required by law.
A Medical plan with compreenisve coverage is type of insurance policy that pays a portion of medical expenses when you need to be seen by a doctor. The portion of expenses paid will vary by the type of policy you choose to buy. Standard health insurance covers visits to doctors or specialists, emergency services, medically necessary procedures such as surgery, x-rays and prescription medications.
Health insurance does not cover 100 percent of your medical costs; you are still responsible to pay a portion of the bill- which are referred to as co-payments (a set amount) and co-insurance (a percentage of the fee). You pay a monthly amount, referred to as a premium, that allows you access to an agreed upon health benefit package or plan.
Insurance options vary and are packaged in different ways to meet the needs of many consumers. As an adult, you need to decide what type of policy you prefer and how much control you want to have over where you receive your medical care.
Types of Structured Health Insurance Plans
- HMO’s and EPO’s limit coverage to providers inside their contracted networks. A network is a list of doctors, hospitals, and other health care providers that provide medical care to members of a specific health plan. You will require a referral from a primary care physician when seeking care from an in-network specialist (i.e. cardiologist, surgeon, etc). If you use a doctor or facility that is not in the HMO’s network, and the care provided was not an emergency service, you may have to pay 100% of the cost of the care you receive.
2. Preferred Provider Organizations (PPO) and Point-of- Service plan (POS)
- These types of insurance are similar to the HMO and EPO plans, with one large distinction. The PPO and POS plans give you a greater choice of the specific doctor you see, allowing you to receive care from providers within or outside of a contracted provider network. With PPO or POS plans, you do have coverage options that allow you to use out-of-network providers and facilities, but the trade off is that you will have to pay a larger share of the cost than if you chose one of the in-network providers. Another difference of a PPO or POS plan is that you can receive care from any medical provider without having to go through the referral paperwork from your primary care physician.
3. High Deductible Health Plan (HDHP)
- High Deductible Plans may be structured as HMOs, EPOs, PPO, or POS plans in terms of network, however they have a couple of key differences when it comes to your when your insurance company pays for your care.
One of the big differences you will immediately see with HDHP plans is that the monthly premium is likely to be lower. HDHP offer lower monthly premiums, but the tradeoff is that the insurer will not pay until you as the patient have paid first a set amount towards your care, and usually a fairly significant amount compared to traditional plans. Called a deductible, this amount is defined within the plan, and is the amount that the patient must pay out of their pocket before the plan begins to pay their portion of the bill. Minimum deductibles range from $1,000 to $10,000 a year for individual coverage and $2,500 for family coverage.
These plans are structured more like your average car insurance plan, they protect you in the event you find yourself facing high medical expenses due to an unforeseen accident or major diagnosis of a chronic or life-threatening illness.
4. Government-sponsored Plans
Plans that are offered by the federal or state government include Medicaid, Medicare, Military or TRICARE coverage, VA veterans benefits, etc. These have strict eligibility guidelines and are only available to consumers who meet the criteria for coverage.
5. Add-on Plans – Dental & Vision
Standard comprehensive health insurance plans do not provide coverage for routine dental or vision care, this requires that you purchase a separate plan. Dental insurance work the same way as health insurance, you pay a monthly premium rate and you are entitled to certain benefits such as regular checkups, cleaning and routine x-rays. Vision insurance helps offset the cost of routine checkups and may help pay for vision correction that may be prescribed. Each of these plans may have co-payments, deductibles and network providers in the same way as your health insurance. You want to be sure to review the benefits prior to purchasing either of these policies to be sure they meet your needs. Its important to note that these plans alone will not satisfy the legal requirement to have comprehensive health insurance.
Effective January 1, 2014, the following provisions apply to all Americans and are required of all non-grandfathered comprehensive health insurance plans:
- You cannot be denied coverage due to pre-existing conditions
- You cannot be charged higher premiums due to health status or gender
- Mandated coverage of routine care costs for approved clinical trials
- Mandated coverage of preventive services at no out of pocket cost
- No more lifetime or annual limits on coverage for essential services
- Right to appeal health plan decisions - internal and external review processes
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There are many different ways you can find and sign up for a health insurance plan to cover your medical needs.
Through your Workplace
One way is to ask your employer what options they offer. Your workplace will have an open enrollment period in which you may choose or change plans. In addition, if you have one of a defined list of circumstances you can enroll outside of those open enrollment periods, including upon initial hire.
Search and Compare Plans through your State’s Health Insurance Marketplace
Another avenue to explore is the Health Insurance Marketplace for your state. A full list of state links can be found at www.healthcare.gov/marketplace Each marketplace allows you to easily compare plan options and costs; helping to decide what plan best suits your needs and your budget. An advantage of enrolling utilizing the marketplace for your insurance, is that it is the only place in which you will be screened for and may receive lower premiums and out-of-pocket costs based on your income.
Applications are accepted during the annual open enrollment period; the dates will be listed on the site. Unless you qualify for an exception (these are listed on the website), open enrollment is the only time you can sign up for insurance coverage through the Marketplace. The enrollment process will also determine if you qualify for your state’s Medicaid insurance program.
Directly through an Insurer or Insurance Broker
If you know which insurance companies offer plans in your area, you may contact that insurer directly to enroll. You will be able to get information about the various plans they offer to residents in your area, however this will only allow you information related to that one insurance vendor. If you work with a broker, you may be limited to the plans that are within their portfolio of options and not be fully comprehensive of what is available in your area. If you want to compare and review your options for a few different insurance companies, you may need to contact them individually.
Through your Parent’s Plan
Before the Affordable Care Act was implemented, insurance companies would not allow children over 18 to remain on their parent’s family plan, with a few exceptions usually for full-time students. However, if your parents are enrolled in a family plan that covers dependents, they can now keep you enrolled on that health insurance policy until the age of 26 years old.
Adult children can join or remain on one of their parent’s family plan even if they are:
- not living in parent’s residence
- attending college/university away from home
- not financially dependent on parents
- eligible to enroll in their employer’s plan
Student Health Plans
If you are a student, another option available to you is to enroll in one of the insurance plans offered through your school. Student Health plans must cover all essential health benefits and comply with ACA provisions.
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