Your 18th birthday marks the beginning of your life as a young adult, but turning 26 years old brings another important change: you will no longer be able to access health insurance through Mom and Dad.
Young adults can be under the health coverage of their parents until this age. After that, they must have their own health insurance plan. Children staying on their parents’ healthcare policy until 26 years old has been one of the most popular measures taken by the Affordable Care Act (ACA), so much so that it survived the attacks on Obamacare by the Trump administration.
What follows is some advice on how to face this transition in the best way possible.
- If you are already financially independent and want to come out from under the family umbrella before you are 26, many young people choose the so-called "catastrophic plans" that are available to people under 30. These plans have high deductibles (what you spend out-of-pocket before the insurer begins to pay for your medical expenses), but the premiums (your monthly fee) are low. Since in most cases young people are healthier and do not need constant medical care, these plans can work for them.
However, and as their name indicates, they only cover emergency care, so it may be worthwhile for you to look into a bronze plan (the cheapest type of marketplace insurance plan.) There may be a slight cost difference, but they offer many more services.
When deciding, you should ask yourself a few questions. Do you smoke? Do you have any chronic conditions? Do you practice any risky sports? Do you ride a motorcycle? They may all be factors that create a medical necessity which you must pay for until you reach your deductible.
If you have health insurance through one of your parents’ jobs, you will generally be left without coverage after your birthday or even at the start of your birthday month, although your parents should check with the insurer (this varies a great deal depending on the insurer and the policy).
When you lose your parent's coverage at 26 (which you receive through their job) and you want to apply for your own coverage using the marketplace, you may qualify for a special enrollment period of 120 days. This window of time starts 60 days before you lose coverage and ends 60 days later. If you register 60 days before, your marketplace plan will start on the first day of the month after your coverage ends.
If you acquire coverage through your own job, you can request that the coverage start as soon as the other ends, thus avoiding gaps in coverage. Note: you should know that the individual mandate (the requirement to have health insurance at the risk of having to pay a fine, a regulation imposed by Obamacare) was in effect until the end of 2018. As of January 1st, 2019, it is no longer mandatory.
If you have coverage from a plan that your parents purchased on the health insurance marketplace, you will be covered under this plan until December 31st of the year you turn 26. However, your new healthcare policy must be in effect by January 1st of the following year. For example, if you turn 26 on September 4, you will have your parent's insurance until December 31. The new insurance must start on January 1 of the next year.
In this case, you may apply for your own insurance on the market during the Open Enrollment Period, which will be available on the federal and most state markets this year between November 1st to December 15th.
And remember that it is never a bad idea to check if you can receive subsidies to help you pay your premium. If you do not receive healthcare through your employer and you earn between 100% and 400% of the federal poverty line, you may be eligible to receive tax credit. Check your local healthcare marketplace.
Depending on your income and the place where you live, you may be eligible for Medicaid, the state-administered federal program that offers healthcare to people with low to moderate income. Eligibility for this program varies drastically from state to state.
If for some reason you cannot immediately decide on your next healthcare coverage (if you are planning to move, travel, or continue your studies, for example), one available option is COBRA, a short-term healthcare plan that covers people who are between jobs. Coverage can extend for up to 36 months, but the cost can be astronomical. It is better to have a good plan in place well before nearing the end of your coverage.
It is always good to have a list of free clinics on hand, in case you need an STD test, for example.