Having access to good healthcare is essential for a healthy and safe life. Many young adults struggle to find healthcare coverage, but if your parents have health insurance, you may also be eligible. This article explains how to use your parent’s health insurance, including the steps to qualify and advice on getting the most out of the benefits to suit your health needs.
For young professionals figuring out adulthood, they may wonder if they can stay on their parent’s insurance until 30. It varies by state, but most young adults will lose coverage soon after turning 26.
Before turning 26, it’s wise to do some research and begin planning ahead. Here is the essential information you should be aware of.
What is the importance of having health insurance?
Health insurance remains important even after you turn 26 because both insured and uninsured individuals can accumulate medical debt. A study by the Kaiser Family Foundation found that 41% of adults have unpaid medical or dental bills.
Don’t let this significant birthday surprise catch you off guard – life can bring unexpected changes and expenses. Take a moment to assess your choices and find a suitable plan that meets your needs and circumstances.
Dependent coverage benefits young adults by letting them stay on their parent’s health insurance plans. This means they can keep getting necessary medical care even if they are unmarried or not full-time students. If you’re under a certain age (usually 26) and meet other requirements, you can qualify as a dependent on your parent’s insurance.
What health insurance options do I have after I turn 26?
When you’re about to turn 26 and have a full-time job, your employer might give you health insurance. Usually, you can sign up during open enrollment, but turning 26 is a special situation that allows you to enroll outside of that period. You have 60 days to do so, so it’s important to have a plan before your birthday.
The popular health insurance options are health maintenance organizations, preferred provider organizations, and high-deductible health care plans. Additionally, you can choose to have a health savings account or a flexible savings account, depending on the plan you select.
To understand the coverage options available to you, it’s important to get familiar with your parent’s health insurance plans. Get a copy of their policy and review the details including the type of plan, network of providers, copays, deductibles, and other relevant information.
After signing up, learn about the different coverage choices you have. These can include regular check-ups, seeing specialists, getting prescribed medications, having tests done, and more. By knowing the restrictions and rules of your dependent coverage, you will be able to make well-informed decisions when it comes to seeking healthcare.
Know the differences between HMO, PPO, and HDHP plans.
What is an HMO?
An HMO is a type of healthcare plan that offers a network of doctors and hospitals to provide medical services to its members. It typically requires members to choose a primary care physician who coordinates their healthcare and referrals to specialists within the network.
An HMO plan has restrictions. It only covers doctors within the network and emergency out-of-network care. Specialists usually need a referral from your primary care doctor. Consider an HDHP if you have significant regular medical expenses.
What is a PPO?
A PPO is a type of health insurance plan that allows you to visit any doctor or specialist without needing a referral. It offers more flexibility in choosing healthcare providers and services compared to other types of plans.
What is an HDHP?
An HDHP stands for High Deductible Health Plan. It is a type of health insurance that has a higher deductible (the amount you pay out of pocket before insurance starts covering costs) compared to traditional plans. HDHPs are often coupled with a health savings account (HSA), providing individuals with the option to save money for their healthcare expenses.
Individuals can use an HSA or FSA to cover expenses not included in their insurance plans.
How do FSA and HSA differ from each other?
A flexible savings account (FSA) is like a dedicated bank account for medical expenses that you can pay for using tax-free funds. You can use an FSA with any health insurance plan offered by your employer. However, there are some limitations to consider. You need to determine how much you want to contribute at the start of the year, with a maximum limit of $2,750 in 2021. Any contributions made by your employer won’t count towards this limit. Additionally, any unused funds at the end of the year will not carry over to the next year.
By enrolling in an HDHP, you can get a health savings account (HSA) that you and your employer can contribute to. You can put in, invest, and withdraw money tax-free for qualified medical expenses. The money also carries over each year. However, there are limits to how much you can contribute. In 2022, individuals with single coverage have a limit of $3,650, while those with family coverage have a limit of $7,300.
What health insurance choices do I have if I am not a full-time employee and am over 26 years old?
College students may have the choice to get their own health insurance plans provided by their school. It’s important for them to compare the benefits, costs, and network coverage of these plans with their parents’ insurance to make smart decisions.
For those involved in the informal economy, working part-time, or currently without a job, here are the healthcare coverage choices available to you.
- Medicaid is a low-cost plan offered by the federal government that helps eligible individuals with lower incomes.
- People with unpredictable incomes can apply for a health insurance plan based on their income estimates in the Health Insurance Marketplace.
- COBRA allows individuals who lose their jobs to maintain their current health insurance temporarily.
As you near the age limit for dependent coverage, it’s crucial to start preparing for your shift to obtaining independent health insurance. Take the time to explore individual health insurance plans, carefully assess your options, and consider important aspects such as costs, coverage, and network providers. Get started early to guarantee uninterrupted health coverage.
Here are some extra resources to help you navigate the maze.
https://www.healthcare.gov/turning-26/
https://www.healthcare.gov/young-adults/coverage/
Using your parents’ health insurance can be helpful during important life stages. To make the most of it, you should know the requirements, explore the coverage options, coordinate well, and choose healthcare providers wisely for preventive services. It’s a temporary solution, so it’s important to transition to independent coverage before the age limit for uninterrupted healthcare access.