Turning 26? A Health Insurance Guide for 20-Somethings
Be sure to get your own health insurance before you turn 26 – you'll get booted off your parents’ plan once your birthday rolls around.
In the good ol’ U.S. of A., children can only stay on their parents’ health insurance until they turn 26. Well, I just turned 26. My last glimmer of childhood has been extinguished. Why did I, like many others, stay so long on my parents’ health care plan? Basically because it’s free for me and free for them.
My parents have a pretty decent health care plan and we always hit our deductible, after which I typically get sick or hurt. Like in the fall. The fall is a dangerous time for me. I’m not sure if that’s normal.
According to Healthcare.gov, a person can stay on their parents’ plan even if they get married; have or adopt a child; start or leave school; live in or out of their parent’s house; aren’t claimed as a tax dependent; or turn down an offer of job-based coverage.
But after turning 26, all of that awesomeness disappears. I had to get health insurance, or else I’d face noncompliance penalty enforced by the federal government.
Every American who isn’t insured faces a penalty. The penalty fee for 2016 is 2.5 percent of your household income, or $695 per adult (half for children), whichever is higher. The fee is meant to counteract the burden you will be on society in the event of an injury or illness. However, it isn’t a replacement for insurance. It just helps offset some of your costs to the government.
You can get cheap health care plans, so don’t even think about trying to pay the fee and having the government take care of you. It doesn’t make sense.
With that said, let’s get covered. I actually wasn’t sure what I was going to do until a couple of months before my birthday. I had a lot of information to parse through.
Options for Health Insurance After 26
Obviously, you could take the coverage offered by your employer. If you’re a student, you could enroll in your school’s student health program. You could see if you qualify for Medicaid.
Or you could also shop for an insurance plan. You can shop the Insurance Marketplace at Healthcare.gov or buy it outside of the marketplace. However, if you buy outside of the insurance marketplace, you can’t get premium tax credits or other savings based on your income. Finally, if you are currently covered under a COBRA plan, you may be able to stay on the plan for an additional 36 months.
About a year ago, I became a full-time freelancer-slash-business owner. As a result, I had to shop the marketplace and outside of it for my coverage. This option involves the most legwork, so if you’re in the same boat, I hope this blog helps you cover the distance.
If you’re an employee, your boss’s plan is probably your best bet. That said, I encourage you to compare it with what you can find on your own. It may be wiser to not have too much of your life wrapped around an employer. If you quit or get fired, finding insurance coverage will be an added concern.
The most convenient way of getting insurance coverage is to go through Healthcare.gov. There’s a guide to help people under 30 choose a plan. It’s called the Young Adult Screener. If you’d like to get health insurance help in-person, you can find local assistance for Healthcare.gov on the site.
I bought my insurance through their website. It’s the easiest way, and it’s the path that seems like the wisest choice.
Aside from Healthcare.gov, there are several private options available as well, and each offers slightly different plans. As a result, it’s best to shop around, and find a few sites that offer the plans that are right for you. In our research, we’ve found a few starting points for your research, including:
Get Health Insurance Before Turning 26
Make sure to do all of this before turning 26. You can enroll with new coverage up to 60 days before your birthday. It’s one of those things that are better to do now than later.
The cheapest plan you can get is the catastrophic plan. The average monthly premium is $144.44 near where I live in Omaha, Nebraska.
I made getting health insurance on time a priority. If I got hit by a bus on my birthday and didn’t have insurance, my health and my wealth could have been destroyed; and those are two of my greatest requirements for living a wonderful life. (Although getting hit by a bus will likely put a damper on your smile, as well.)
If this blog post is turning into a PSA for looking both ways before your cross the street, I mean it. Seriously. Do it. If you’re on a date, hold hands as you cross, confident in the knowledge that, if the worst is to happen, you are covered. You’re welcome!