Paying rent on your own, making your first car payment, doing taxes—sometimes the “real world” isn’t as exciting or easy as you thought it would be. This is proven by an eHealth survey that found that what young adults believe is a fair price for health insurance is a fraction of the price it actually costs. Health insurance is another new responsibility for young adults to navigate, and many might feel lost in the process.

Fortunately, eHealth makes getting health insurance much easier for young adults who are exploring the process for the first time.

Importance of having good insurance for young adults

While you’re not required to have health insurance as a young adult, it’s definitely recommended.

26 million, or 7.7 percent of the U.S. population in 2024 are uninsured, but having health insurance is crucial for all young adults. Young adults often think they are young and healthy, so they don’t need to invest in health insurance. However, a medical emergency can arise for anyone, regardless of age. Additionally, preventative care is a smart move for all ages and health levels. Having the ability to see your doctor regularly to monitor your health and wellness is one of the great advantages to having coverage, so that you can catch any health issues before they become a larger problem. It is critical that you do your research and get the insurance coverage that fits your needs and budget.

Understanding health insurance basics

Grasping the fundamentals of health insurance before selecting a plan is essential to ensure you make an informed decision that aligns with your health needs and financial constraints.

Key health insurance terms

When exploring health insurance options, understanding these key terms will guide your decision:

• Premiums: Regular payments to maintain your insurance coverage.
• Deductibles: Amounts you pay out-of-pocket before your plan starts paying.
• Co-pays: Fixed charges for specific services, like a doctor visit.
• Out-of-pocket Maximums: The maximum amount you’ll spend in a year on covered health expenses.

Network Types:

• HMO (Health Maintenance Organization): Requires using network providers for lowest costs.
• PPO (Preferred Provider Organization): More flexibility for using out-of-network providers.
• EPO (Exclusive Provider Organization): Network restrictions without referral requirements.
• POS (Point of Service): Combines features of HMO and PPO, offering both in-network and out-of-network coverage.

Types of health insurance plans

Navigating the health insurance landscape can be complex, with various types of plans catering to different needs and circumstances. Individual health insurance plans are chosen and paid for by individuals, not tied to employment. Employer-sponsored plans, on the other hand, are provided by companies to their employees and often extend to family members. Medicaid and the Children’s Health Insurance Program (CHIP) offer low-cost coverage for eligible individuals and families, particularly those with lower incomes. Catastrophic plans provide minimal coverage aimed at protecting you in worst-case scenarios—ideal for those who want coverage for major emergencies. Each type of plan is designed to meet specific healthcare needs, making it essential to assess which one aligns best with your personal or family situation.

Affordable Care Act (ACA) and young adults

The Affordable Care Act (ACA) has notably improved health insurance accessibility for young adults, introducing several key benefits. Young adults can now remain on their parents’ insurance plans until they turn 26, offering a vital safety net during early career stages. The ACA also provides income-based subsidies and tax credits, making health insurance more affordable for young individuals entering the workforce. Moreover, it emphasizes the importance of preventive care, encouraging a focus on long-term health from a young age.

ACA benefits for young adults

According to the Affordable Care Act (ACA), also known as Obamacare, young adults may remain on their family’s health insurance plan until the age of 26. This extension provides crucial health security during a transitional phase of life when many are starting careers or studies and may not have access to employer-based insurance. Beyond this, the ACA offers substantial benefits for young adults, including subsidies and tax credits that make purchasing plans through the marketplace more affordable. It also mandates that all plans cover essential health benefits, ensuring comprehensive coverage that includes preventive services, mental health care, and more. These provisions collectively create a safety net, enhancing healthcare accessibility for young adults.

How to enroll in ACA Marketplace plans

Enrolling in ACA Marketplace plans is streamlined, particularly during the Open Enrollment Period from November 1 to December 15 each year, when anyone eligible can sign up for a new plan or modify an existing one. Turning 26 is a qualifying life event that allows for a special enrollment period, enabling young adults to enroll in their own health plan after losing coverage under their parents’ plan. Additionally, other qualifying life events like marriage, moving, or losing other health coverage also trigger a special enrollment period, allowing for continuous coverage without waiting for the open enrollment. This special enrollment period typically lasts 60 days after the qualifying life event occurs.

Health insurance options for young adults before and after turning 26

As you approach and surpass your 26th birthday, your health insurance options change significantly. Before you turn 26, you’re likely covered under your parent’s insurance plan. But once you hit 26, you’ll need to find your own coverage. This might seem daunting, but understanding your options will help you navigate this transition smoothly. This section will guide you through various pathways, whether it’s exploring marketplace plans, considering employer-sponsored insurance, or looking into individual coverage solutions. Making informed decisions now is crucial for maintaining continuous, affordable health coverage.

Staying on parents’ insurance plan

Young adults can remain on their family’s health insurance plan until the age of 26, which often makes health insurance more affordable while providing a financial safety net during early career or educational phases. This coverage grants access to comprehensive medical services that might be costlier through individual plans. However, it’s crucial to evaluate if this coverage fits your specific health needs. In some cases, a plan with specialized services or a different provider network might be more beneficial, even if you are eligible to stay on your parent’s plan.

Individual health insurance plans

Individual health insurance plans are tailored to one person but can often extend to cover their family as well. To find and purchase one of these plans, you can browse through the Health Insurance Marketplace or contact insurance providers directly. It’s important to compare the basic costs and coverage options of each plan to find one that fits your healthcare needs and budget. Opting for an individual plan might be advantageous if you need specific services not covered under another’s plan or if you move out of state, where your current coverage may not apply. This flexibility makes individual plans a strong option for young adults seeking personalized healthcare solutions.

Even if your parents have agreed to keep you on their health insurance plan, it may be more financially reasonable to get your own health insurance if you are moving further away and out of your plan’s network. Going “out-of-network” will likely result in higher out-of-pocket medical expenses and could even mean losing coverage for some services. To avoid this, make sure you have a health insurance plan that covers providers in the area where you will be living.

Employer-sponsored health insurance

One of the easiest ways to enroll in health insurance as a young adult is to join your employer’s health plan. There are many benefits of joining your employer’s health plan, including that your employer will often split the premiums with you and they do all the work of actually choosing a health insurance plan, so all you have to do is sign up for it.

Short-term student health insurance

A great option for health insurance for students is to enroll in your school’s plan. However, health insurance obtained through a school is considered a short-term type of health insurance and will expire when you stop being a student at that school.

Health insurance through Medicaid

Another option for health insurance for young adults is to see if you qualify for Medicaid. However, you must meet certain eligibility requirements to qualify for Medicaid, such as income limits, so make sure you look into the requirements before you apply. You can also check out Medicare options as well.

Catastrophic or short-term plans

Catastrophic and short-term plans are specific types of health insurance designed to meet different needs. Catastrophic plans typically cater to people under 30, covering major emergencies and preventive care at a low cost upfront, but they come with high deductibles. Short-term plans are geared towards providing temporary coverage for up to three months and can be more affordable, but offer limited benefits and don’t cover pre-existing conditions. Both options might appeal to young adults for their affordability and the essential coverage they provide in emergencies. However, for some, the availability of subsidies for major medical plans may offer a more cost-effective solution.

These coverage alternatives can be good options for young adults, because they are often more affordable and cover some medical expenses in the event of an emergency. For others, the subsidies might make a major medical plan the most affordable option.

Cost considerations for young adults needing health insurance

Navigating the costs of health insurance is a critical concern for young adults, who often face diverse financial circumstances. This section will explore various cost considerations, from understanding premiums and deductibles to assessing the value of different types of plans. We’ll also discuss how subsidies can impact affordability and offer tips on finding cost-effective coverage that doesn’t sacrifice essential health benefits. Whether you’re transitioning off a parent’s plan or purchasing your first policy, understanding these financial elements is key to making informed health insurance decisions.

Budgeting for health insurance

For young adults, budgeting for health insurance is essential to managing finances effectively. It’s important to estimate monthly premiums and expected out-of-pocket costs, which include deductibles, copays, and coinsurance. To manage these expenses efficiently, consider setting aside a portion of your monthly budget specifically for health costs and shop around during open enrollment periods to find the most cost-effective plan that meets your needs. Additionally, always factor in the potential for unexpected medical expenses to ensure you’re fully prepared.

Financial assistance and subsidies

Subsidies are a vital resource for making health insurance more affordable, especially for young adults leaving their parent’s plan. Once you know how much you qualify for in government subsidies, it might help you decide between ACA-compliant health insurance, or other alternatives like catastrophic or short-term plans. To understand your eligibility for these subsidies or other state-specific assistance programs, tools like eHealth can be instrumental. They provide guidance on how much subsidy you qualify for and help determine the best plan for your financial and health needs. Additionally, exploring local assistance programs can uncover more ways to save on health costs.

eHealth can help you figure out if you qualify for a subsidy and which plan may work best for your needs. Check out individual and family health insurance plans to see what your options are!

How to find good insurance for young adults

If you are a young adult shopping for health insurance, let eHealth help. We compare thousands of plans in every state to ensure our customers can find the best plan for their needs and budget. With eHealth, you can check out different health insurance providers and choose the health insurance option that best meets your unique needs as an independent young adult.

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