Over 26? Here’s what you need to know about health insurance
If you are 26 or over or want to get a head start on planning for your future, you’ll need to learn a few things about health insurance. In the United States, the age of 26 is when you can no longer be covered by your parent’s health insurance. I remember this day vividly. My 26th birthday was approaching, and I had to inform my current employer that I would now need health insurance payments deducted from my salary. Needless to say, I wasn’t thrilled. Not only was my paycheck going down, but there was so much I needed to learn about health insurance. I want to ensure that you are fully aware of all things related to health insurance and how to select the best coverage for you, so here are some basics!
There are different types of health insurance:
Health Maintenance Organization (HMO) – HMO plans offer a wide range of healthcare services through a network of providers who agree to supply services to members. You must go to a doctor or hospital in the HMO network to receive full coverage. If you choose an out-of-network doctor, you will be required to pay for most or all of the medical expenses, unless it is a true medical emergency. One unique feature of HMO plans is that you must select a primary care physician (PCP), who serves as your first point of contact for all your basic medical needs. If you need to see a specialist or receive any diagnostic services, you will need to get a referral from your PCP. Some people favor this plan because of the low premiums and deductibles. One thing to note, however, is that your physician network will be local to where you live or work with an HMO plan.
Preferred Provider Organization (PPO) – A PPO is a medical care arrangement in which medical professionals and facilities provide services to subscribed clients at lower rates. With a PPO, you can go to any of the in-network providers without a referral and most of the cost will be covered by your insurance company. Out-of-network providers may still be covered but at a lower amount. A bonus of the PPO plan is that you also have access to out-of-state physicians who are still considered in-network.
Exclusive Provider Organization (EPO) – An EPO is a group of doctors and hospitals within one network or alliance, which is set up like a combination of both an HMO and PPO. To see a specialist, you must receive a referral from your PCP, but you also have access to both in-network and out-of-network physicians. In-network physicians will be less costly, of course, but this plan gives some flexibility if you are willing to pay more.
Why you should get health insurance even though you aren’t required to:
Research conducted by the Kaiser Family Foundation found that medical debt is the number-one cause of personal bankruptcy filings. One medical emergency without having health insurance coverage could completely wipe out your finances. Even basic medical expenses like a doctor’s appointment can get expensive. The average doctor visit costs $160, and that doesn’t include any necessary procedures such as blood work, x-rays, testing, etc. Your bill can escalate quickly! Due to new legislation, you are no longer required to have health insurance. However, it’s still wise to do so, unless you are extremely wealthy and can handle hundreds of thousands of dollars in medical expenses in case of an emergency.
Why you must be prepared to choose wisely!
There are only certain time periods when you can enroll for health insurance coverage. These times are during open enrollment, which is the annual time period when people can enroll in a health insurance plan, or when a qualifying life event occurs, which is a change in your current status, such as getting married, losing prior coverage, or having a baby. Turning 26 is also considered a qualifying event. You have 60 days before and 60 days after your 26th birthday to secure your own health insurance. That’s not much time if you are going in blind. I highly recommend doing your research in advance so that you know the best options for you. This is crucial because once you pick a plan, you will most likely be stuck with it until the next open enrollment period or qualifying event.
Studies show that people without health insurance are less likely to seek medical attention when needed because they cannot afford the cost. You may be young and healthy, but anything can happen – from broken bones to the flu. You don’t want to risk your financial health or your physical health by not having health insurance!