Do millennials need health insurance?
According to the Pew Research Center, you are a Millennial if you were born between 1981 and 1996, you’re considered a millennial. Ranging from as young as 23 years old to a very adult 38 years old, your cohort is cost-conscious (thanks recession) with buying habits that are drastically different than previous generations. You are actually financially savvy but, at the same time, tend to put off long-term financial planning, like saving for retirement and having health insurance. Overall, you also tend to pursue a healthy lifestyle, so it’s interesting that many millennials put off important health care needs. Today, SGIC answers the question: “Do millennials need health insurance and what are your options?”
Without health insurance, you are more likely to ignore preventive and minor healthcare concerns, until something really goes wrong. Unfortunately, because you’re young, the thing that “really goes wrong” could create a long-term, maybe even lifelong, financial impact.
That is why health insurance, along with your retirement savings, should be a priority for millennials. Investing a little bit upfront may save you a lot of money in the long run.
Must Know Health Insurance Terms for Millennials
First things first, we want to clarify some key health insurance terms that you may not know:
- Premium – amount you pay for your coverage, usually monthly.
- Deductible – amount you pay for covered services before your health insurance begins to pay.
- Copayment – fixed dollar amount you pay for your healthcare providers’ services or prescription drugs.
- Coinsurance – percentage you’re responsible for paying after your insurance pays its part of a covered service. For example, if your insurance pays 80%, you are responsible for the remaining 20% of the charge.
- Out-of-pocket maximum – maximum amount you will pay for covered services during a benefit period (usually, one year). Does not include premium or services not covered. May include copayments, deductibles, and coinsurance.
Have questions about health insurance and your options? Call SGIC at (888) 912-4767, and we’ll get you in touch with a licensed agent.
What kind of health insurance can I afford?
Millennials as a group carry a lot of debt (mostly student loans) and are frugal shoppers, using coupons and purchasing less expensive generic/store brands over name brands. They value convenience, price, and customer service.
If this describes you, you may believe there is no such thing as affordable health insurance. The truth is you have a number of health insurance options, depending on your current life circumstance.
Your health insurance options
Your parents’ insurance
If you are under 26, stay or get on your parents’ health insurance plan, if it covers dependents. This is your least expensive option, costing you nothing (unless your parents make you chip in). You can stay on that plan until you turn 26 even if you have a full-time job, get married, are in school, live at home, live on your own, or have children.
Your school’s insurance
If you’re a full-time student at a university or college and are not eligible for your parents’ health insurance, you may be able to enroll in a student health plan. Often, the cost of a school’s health insurance plan can be included with your tuition, room, and board, which means you can use your student loan to pay for it. The main downside is the plan may not be as robust as traditional health insurance.
The health insurance marketplace
Another option is the health insurance marketplace (Obamacare). Depending on your income level, you may qualify for a subsidy to help you pay for the premiums, and you will you have comprehensive, Affordable Care Act (ACA)-compliant healthcare coverage. The federal or your state’s marketplace offer a number of plans that have varying monthly premiums, deductibles, etc. Make sure you shop around to find the most affordable plan.
Off-exchange health insurance
If you don’t qualify for a subsidy on the health insurance marketplace, you can look for equivalent, ACA-compliant health insurance plans directly from the health insurance carrier or an outside broker or agent, usually referred to as an off-exchange plan. Again, shop around; you may find a plan with similar benefits at a cheaper cost than on the marketplace (if you’re not getting a subsidy).
Employer-provided health insurance
Working full time? Then, your employer may offer a group health insurance plan and pay for a portion of your premium. Keep in mind you are not obligated to enroll with your employer’s health plan. While it’s likely your employer’s health plan will be the best deal (if you’re too old to be on your parent’s insurance), it doesn’t hurt to check out your other options, whether on or off the exchange.
Short term medical insurance
Short term medical insurance may be a good option when you’re in-between being on your parents’ insurance and being able to enroll in either the marketplace or an employer-provided insurance, in-between jobs, a contract or freelance employee, or just find yourself without the type of coverage that fits your current lifestyle and budget.
Short term medical is considered comprehensive health insurance, but it is not ACA-compliant and may deny coverage if you have a pre-existing condition.
Supplemental health insurance
If comprehensive health insurance is not available or out of reach, but you know that some insurance is better than no insurance, take a look at supplemental health insurance plans.
While also not ACA-compliant, these plans are generally very affordable, easy to apply for, and pay benefits directly to you rather than to your doctor. A limited indemnity medical policy from SGIC can cover hospital stays, surgery, emergency room, doctor visits, and even wellness care. Other types of supplemental health insurance we offer include critical illness and accident insurance.
Catastrophic health insurance
Similar to supplemental health insurance, catastrophic health insurance can be attractive because it is so affordable. Only people who are under 30 years of age or that have a hardship or affordability exemption can purchase catastrophic health insurance on the federal or state exchanges.
Catastrophic health insurance pays benefits when you are very sick or in a terrible accident. It is also required by the ACA to cover the 10 essential health benefits but only after you meet your deductible, which could be as much as $6,000—which means, if you do need to use it, it’s going to cost you.
Medicaid
You and your family may qualify for Medicaid, which is free or low-cost coverage for you if your income is below a certain level, you’re disabled, or you’re pregnant. Visit your state’s Medicaid website to find out if you’re eligible.
As you can see, there are many healthcare options for millennials to make sure that you’re protected. Our goal at SGIC is to help you find a short term or supplemental health care policy that suits your budget and unique needs. Have questions about health insurance and your options? Call SGIC at (888) 912-4767, and we’ll get you in touch with a licensed local agent.