Health Insurance for Unemployed Young Adults

Anyone—especially a young person—who has ever been without a job knows the immense stress that can overwhelm your life.  One of the biggest worries is how medical bills will be paid.  After all, the easiest way to be covered with medical insurance is to be a part of a group plan.  There are less pre-existing condition exclusions to worry about, and an employer will usually subsidize the cost of the plan, making it much cheaper than going out on your own and buying an insurance policy.  However, if the day comes that your job is no longer around, know that comprehensive health insurance for unemployed young people can be found at an affordable rate.  Here are ways to make that happen.

COBRA Health Insurance for Unemployed

If you worked for a company that employs more than 20 people, then COBRA insurance is available.  COBRA allows former employees to continue on the medical plan that they were a part of when they were employed.  The access to quality insurance is a good thing about COBRA.

However, there is a significant downside to this form of health insurance for unemployed young people, and that is the cost.  To be on a COBRA plan, you are required to pay the entire monthly premium of the plan (plus 2% for administrative costs).  Since the premium was most likely partly paid for by the company, the cost of COBRA insurance will be a big jump from what was being paid previously.

Parent’s Plan

The Patient Protection and Affordable Care Act, also known as PPACA or Obamacare, allows people to be enrolled on a parent’s plan until the child reaches age 26.  This can be a terrific option of health insurance for unemployed young people.  If your mom or dad has group insurance, they can enroll you in their plan if you lose your job.

The upside of this is that to add a child to a plan is not very expensive.  In fact, if another child is already on the plan then there will probably not be an additional cost.

Marketplace Health Insurance for Unemployed Young Adults

The Affordable Care Act set up health insurance marketplaces, also known as exchanges, where people can go online and shop for health insurance.  The exchanges might be a good option if a young person is having trouble finding good, affordable coverage elsewhere.

The marketplaces can be a great place to find health insurance for unemployed young people since the federal government provides tax credits to individuals that earn less than 400 percent of the poverty level but are not eligible for Medicaid.  Many unemployed young people will fall in this category.

The marketplaces are also good places to find health insurance for your children.

Medicaid

While Medicaid isn’t technically health insurance for unemployed young people, it can be a good way to help pay for medical expenses.  Medicaid is administered by the states, and eligibility varies by state.  PPACA expanded Medicaid eligibility, but not every state has implemented the new Medicaid rules.

If your child needs Medicaid, but you are not eligible, CHIP insurance is available.

If Medicaid or CHIP is something you are interested in, check out your state’s Medicaid website.

Find Health Insurance One Way or Another

With the cost of health care continuing to rise, quality and affordable health coverage is needed.  Fortunately, finding health insurance for unemployed young adults is not as difficult as it used to be.  Government programs and group plans are available to keep from going broke when you least can afford it.

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Self Insured Health Plans – When an Insurance Company Isn’t the Insurance Company

To those not involved in the day-to-day workings of health insurance, it all can look the same.  You pay a premium and hopefully when you have a claim, the insurance company makes their share of the payment.  But not everything is as it seems.  Many times what you think is the insurance company is nothing more than a claims payment system.  When you have problems with claims getting paid, your beef may actually be with an organization much closer to home.  You might be a member of one of many self insured health plans in the country.

What are Self Insured Health Plans?

Self insured health plans are typically used in group health insurance.  Instead of a typical plan in which a policyholder pays a monthly premium and the insurance company pays claims, in a self insured (also know as self funded) arrangement the policyholder (the employer in a group plan) contracts with a claims administrator (called a Third Party Administrator, or TPA) to only pay claims.  The employer pays a fee to the TPA to process these claims.  The employer then pays the claims, not an insurance company.  The “premium” that the employer pays is actually a funding rate that is used for budgeting and COBRA purposes.

The reason that people can be confused about who is the insurer is that nowadays most insurance companies also perform TPA functions.  This allows group insurance plans to tap into the network discounts of the insurance company.

Self insured health plans leave the employer at risk of paying more out in claims than they budgeted.  However, there is less fixed expense in a self funded plan than a fully insured plan.

You will see a self insured plan more often with large groups since it is easier to predict the future claims of a large group than a small group.

How Do Self Insured Health Plans Affect a Plan Subscriber?

If you are on a self funded plan, it is important to note that if you have an issue with a medical expense being covered, your beef is not with an insurance company.  It is with your employer.  Self insured health plans dictate to the TPA what is covered and what is not.  The TPA is then required to administer the plan the way the group wants.  Of course, group plans must still adhere to Affordable Care Act guidelines.

That doesn’t mean that the TPA doesn’t make mistakes in claims processing; that still happens occasionally.  But if you are part of a self insured plan, determining what is covered is up to your employer.

How Do I Know if I’m Part of a Self Insured Health Plan?

There really is no way of knowing for sure if your employer’s plan is self funded unless you ask.  If you are part of a large group, the odds are that the plan is self insured.

As for the actual mechanics of a self insured plan, there is no difference as far as you are concerned.  You see a doctor, pay your share of the claim, and the rest gets paid by someone else.  Just know that if a claim is excluded from the plan, you should discuss with your employer first.

Self insured health plans are good options for everyone involved.  They help keep costs of insurance down for the plan, which allows an employer to hopefully keep the cost to their employees as low as possible.  Make sure you know who to go for if you have questions about your claims.

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Is Group Health Insurance Good for Young People?

When you are first offered group health insurance through your employer you will probably question whether it is the right insurance option for you.  There are other options available to young people at various costs, and while insurance at work provides good coverage at a reasonable price, there are also some drawbacks.

What is Group Health Insurance?

Group insurance is a way for employers to provide health insurance to their employees at a single rate.  Instead of each employee having his or her own rate based on demographics, the group as a whole is rated together.  Depending on the size of the company, the rate is based on claim experience, the insurance company’s book of business experience, or a blend of both.

Employers usually help offset some of the cost of a group plan by not requiring employees to pay the full cost of the premium.  The Patient Protection and Affordable Care Act (PPACA), or Obamacare as it is frequently called, sets limits on the monthly contribution employers can require employees to pay in a group health insurance plan without the employer facing a steep fine.

What is Good About Group Health Insurance?

As mentioned above, perhaps the best thing about a group insurance plan is that the cost is not as high as if you bought an insurance plan on your own on the individual market.  Employers almost always pay a heavy portion of the employee only premium.  It depends on the company as to how much they will pay for dependent coverage.

Group medical insurance plans will also include robust plans.  The Affordable Care Act requires coverage for certain essential benefits.  There are also caps on the out of pocket expenses that these plans can force employees to pay.

Employers use benefit brokers and consultants to help set up their packages and leverage the insurance companies for the best plans and rates available.  This helps keep costs down for everyone.

With group insurance, there are several entities that have an interest in keeping the cost of the plan as low as possible.  Because of this, many plans have robust case management programs to help employees get the most effective care possible when there is a significant medical need.

What are the Limitations of Group Health Insurance?

With a group plan the employee is stuck with the options that the employer has chosen.  A lot of thought goes into the benefit decisions, but the plans are not the best way for all employees to meet their budgetary and medical needs.  Maybe you’d like a lower deductible.  Or maybe you’d like lower premiums.  With an employer based plan, you must choose what your company has chosen for you.

Employers do not always pay very much of the premium for coverage for a spouse or children.  Even with the subsidy that your company pays for your coverage, it may still be less expensive to go elsewhere to find a family plan.

Doing a cost-benefit analysis can help determine if a group health insurance plan is right for you.  Before enrolling, make sure to check out your other options on the individual market or health insurance exchanges.  There are good options available.

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