There are not many problems with being young. One of them, however, is that it can be difficult to find affordable medical insurance. A good health insurance plan is not cheap and will still usually leave you with a large medical bill if you use the plan. But that doesn’t mean that you have to pass up the opportunity to buy coverage for yourself and/or your family. There are ways to be able to afford a good plan. Here are some of best.
Why it is Important to Have Medical Insurance
There are a couple of big reasons to have medical insurance. For one, in the event that you need medical services, you will owe less out of pocket if you have an insurance plan. With an insurance company, you will get the benefit of having bills discounted, which you will not receive if you are not covered. You will be responsible for the entire bill and having to negotiate with the doctor or hospital on your own.
Second, the Patient Protection and Affordable Care Act (Obamacare) requires every American to be covered by a health insurance plan, or else face a tax. The requirements for this mandate are not too strict, so finding affordable medical insurance and avoiding the penalty is possible.
Health Insurance Marketplaces
The Affordable Care Act created health insurance exchanges, online marketplaces where individuals can compare plan designs and premiums for plans from various insurance companies. The idea of the marketplaces is that with a level plan design playing field, insurance companies will get competitive with each other to drive down the cost of insurance. While the jury is still out on this, the law created another way to find affordable medical coverage on the exchanges.
That would be by giving tax credits to help offset the cost of the insurance premiums. If you make less than 400% of the federal poverty level and are not eligible for Medicaid, you will receive assistance to pay for the coverage.
The marketplaces are administered by the states. You can find your exchange here.
Group coverage has always been a decent way to receive affordable medical insurance. Employers typically subsidize the premiums and offer a reasonable plan. Obamacare has made it even easier to afford the cost of a group plan. The law states that an employer can only charge an employee up to 9.5% of the employee’s salary. So for someone making $20,000 per year, 9.5% equals $158 per month. That sounds like a lot, but it is a small percentage of the actual premium.
The Affordable Care Act also states that an employer must offer a plan that pays for at least 60% of the cost of the claims (with the other 40% paid by the member). A 60% plan will have a large out of pocket exposure, but will keep you from going broke in the event of a major illness or sickness.
Catastrophic Health Insurance
Another way to find affordable medical insurance is catastrophic health insurance. Catastrophic health insurance has large out of pocket limits, but the premiums are small. So while the coverage is affordable on a month-to-month basis, it will not be affordable if you have a significant claim event. But at least you’ll have medical coverage. Most catastrophic plans will meet the requirements of coverage needed to avoid the individual mandate penalty.
A Parent’s Plan
Obamacare allows children to remain on their parent’s plan until age 26. Not only is this a way to find affordable medical insurance, it can be a way to get free health insurance. If a child is already on the plan, there is usually no additional cost to add another child. This can be a great way for young people to get covered.
Affordable Medical Insurance is Available
Affordable medical insurance is available to young people. However, affordable can be a relative term. Healthcare is expensive, and so is the insurance to cover it. But with some work, you can find a plan that fits your needs and your budget.