Under current law, you can stay on your parent’s health insurance policy until you turn 26.
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in some states, it’s even longer.
When it comes time to get your own insurance, it’s important to know what your health insurance options are and how to choose the right plan.
It can be a confusing topic, and sometimes it’s hard to know what your best options are.
This article breaks down what you need to know about your health insurance options, how to choose a plan that’s right for you, and even if you need insurance.
when you lose health insurance through your parents
Currently, the Affordable Care Act (ACA) requires that your parent’s insurance plan cover you until you turn 26.
You qualify for your parent’s coverage even if you are:
- attending school
- not living with parents
- not financially dependent on parents
- eligible to enroll in your employer’s plan
If your parents have their insurance plan through an employer, you generally have coverage through the end of the month of your birthday.
Check with your individual plan to be sure, as some states and plans have different rules.
If your parents have a Marketplace insurance plan, you have until December 31 of the year you turn 26 to get their coverage.
states with an extended age limit
Some states have an extended age limit to stay on your parent’s policy if you meet specific criteria.
To be eligible for extended dependent coverage, you typically cannot be eligible for any other form of comprehensive health coverage.
For example, if you’re eligible for your own employer’s health insurance, you may not be able to extend your parent’s coverage. (This does not apply to people who have a disability.)
The following are the states that offer exceptions; however, laws are always subject to change, so check the laws in your own state.
health insurance options
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If you’re approaching the age of your parents’ insurance policy, you have a few options to choose from.
employer sponsored insurance
If you or your spouse are currently employed full-time, you may be able to obtain health insurance coverage through an employer.
You must request special enrollment within 30 days of losing coverage.
medical insurance market
For individual coverage, you may qualify for special enrollment through the Health Insurance Marketplace.
To purchase a Marketplace plan, you must special enroll within 60 days of your plan expiration date. You can find more information here.
You may even qualify for subsidies that can make your coverage more affordable.
If your parent’s employer sponsors 20 or more employees on their plan, you may be eligible to purchase a temporary extension of health coverage for up to 36 months under the Consolidated General Budget Reconciliation Act (COBRA).
Be sure to notify your parent’s employer in writing within 60 days before your 26th birthday if you want to elect cobra coverage.
If you’re applying for insurance through your state’s health insurance marketplace, you’ll be asked to enter your income amount.
Depending on how much you earn each year, you may qualify for your state’s Medicaid program.
school-sponsored health insurance
If you are currently attending college as a full-time student, you may be able to get health coverage through your school’s insurance policy.
This is a great option for graduate students who are aging and outgrowing their parents’ plan age.
choosing the right health insurance
The health insurance plan you choose depends to some extent on your health status.
If you’re in good health and don’t require monthly prescriptions or need a procedure, you’ll want a different plan than someone who does.
types of plans
These are the most common types of health insurance plans.
exclusive provider organizations (epo): An epo plan requires you to seek health care services from doctors and hospitals within its defined network if you want your costs to be covered, with exceptions for care emergency.
Health Maintenance Organizations (HMOs): HMO plans typically contract with doctors within a specific area to provide services, including preventive measures. Except in an emergency, this plan type only covers the cost of services provided by in-network health care providers.
Point of Service (POS): POS plans offer medical and hospital care at a reduced cost when you seek care from their in-network providers. if you need to see a specialist, you’ll need to get a referral from your primary care doctor.
preferred provider organization (ppo): With a ppo, you pay less for health care services when you only use in-network providers. this plan does not require a referral to see a specialist.
Marketplace: The health insurance marketplace offers a few different levels of coverage plans. plans are broken down by level:
- Gold and Platinum: These plans have the highest premiums (monthly payments), but they also have the lowest deductibles (the amount you have to pay out of pocket). this means you’ll have access to your coinsurance benefits quickly. If you are in good health, this policy could end up costing more compared to the benefits you will receive. however, if you need monthly medications, this plan would be a great money-saving plan for you.
- Silver: These plans have average premiums, deductibles, and out-of-pocket maximums. It’s more expensive than the cheapest plan, but it’s a great plan if you’re getting ready to start a family. Plus, Silver plans offer cost-sharing discounts if your income is below 250% of the federal poverty level.
- Bronze: These plans have low premiums and high deductibles, but they are only available for people under 30 years old. If you’re eligible for subsidies, you can apply for a bronze plan for a low monthly fee. this type of plan is good if you don’t expect to have a lot of medical expenses throughout the year.
- catastrophic: These plans are also only available to people under 30 years of age. They are the cheapest plans available on the market, but they have the highest deductibles and out-of-pocket maximums. This type of affordable plan is great if you’re healthy and don’t expect substantial medical costs. subsidies cannot be applied to catastrophic plans.
Which plan you choose, there is a required monthly premium (how much you pay for the plan each month).
If you don’t need medical care, your premium is the only payment you can expect.
However, if you need health care services, you will also have to pay other costs.
- deductible: This is the amount of money you pay out of pocket before the policy benefits start to cover the costs. For example, if you have a $2,000 deductible, you’ll need to pay the first $2,000 of any medical bills before your insurance begins to pay.
- Copayment: Also called a copayment, the copayment it is usually a fixed cost for a service (for example, $25 to see your primary care doctor). once you meet your deductible, you will only be asked to pay your copay when you visit your doctor.
- out-of-pocket maximum – This is the maximum amount of money you will pay out of your own out-of-pocket health care services in a single year. until you reach this maximum, you are responsible for all out-of-pocket costs.
Do I need health insurance?
If you’re healthy, you might think you don’t need health insurance coverage.
But keep in mind that accidents happen all the time and health care services can be expensive without the help of insurance.
according to the us centers of medicare and medicaid services, the average hospital stay can cost $10,000 per day.
While that may be an extreme case, injuries and illnesses can come as a surprise, and signing up for health insurance is an easy way to help avoid high medical bills if a problem arises.
It’s always better to plan ahead, you’ll be glad you did.
how health can help
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