(Best) Health Insurance for Young Adults

Jenifer Dorsey
August 15th, 2019 September 5th, 2018 |
Read time: 8 minutes

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Find out if you qualify for temporary coverage for emergencies and hospitalization – Don’t go uninsured between major medical plans.

6 health insurance options for young adults

This article will explore the following health insurance options for young adults, including 20-somethings, recent college grads, students, those entering the workforce and others:

  1. Short Term Medical Insurance: temporary benefits for those in-between times
  2. A Parent’s Health Insurance Plan: coverage until age 26
  3. Individual Major Medical: an ACA-compliant option that may include access to catastrophic plans and subsidies
  4. Job-Based Coverage: major medical insurance through an employer
  5. Medicaid: a low-cost or no-cost option for those who qualify
  6. Student health insurance: major medical offered by some colleges and universities

When you’re young and starting out, health insurance may be low on your list of priorities. And, when you do think about it, you probably have concerns around choosing the right coverage, understanding how health insurance works, and finding a plan with an affordable premium.

Some of the most common inpatient young adult hospitalizations since the Affordable Care Act (ACA) took effect are for pregnancy, treatment for mental illness, or experiencing an injury or poisoning that requires medical care.1 Should care/treatment be needed, are you prepared for the related medical bills?

Fortunately, it should be easy to find an insurance plan. Under the ACA, young adults have many healthcare coverage options. That’s especially good news since young adults are often in a time of transition from student life to working life, in search of affordable health insurance, and on a tight budget.

Keep reading for an overview of health insurance options for young adults, including students, non-students, those under age 26 and those older than age 26.

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Short term health insurance for 20-somethings

Need coverage quickly? If approved, you can obtain short term health insurance benefits as soon as the next day after applying. These temporary plans last 30 to 364 days, with duration limits varying by state, and are designed to provide “catastrophic” coverage for a wide range of unexpected healthcare services. Benefits often include hospital room and board, ambulance services, surgery, emergency room treatment, and intensive care, to name a few.

Compare costs and coverage by requesting a quote (it just takes a minute).

Get a Short Term Health Insurance Quote

When is short term insurance the best health insurance option for young adults + students?

Whether you’re a recent grad, younger than 26 or older than 26, consider temporary coverage when you:

  • Don’t have access to major medical through a parent
  • Aged off your parent’s health insurance plan
  • Are in an employee waiting period for benefits
  • For any reason find yourself between health insurance plans outside of open enrollment and don’t qualify for special enrollment

Assess this option

Short term health insurance for young adults

Short Term Medical
Sample Rate (monthly premium) $41.082
Year-Round Enrollment
Next-Day Coverage Available
Guaranteed Issue
Provider Choice
Subsidy Eligible

What else is worth knowing?

Short term plans:

STM plans can:

  • Deny coverage or exclude coverage for pre-existing conditions.
  • Exclude benefits such as prescription drugs.
  • Set coverage limits for the policy period for things such as hospital stays or surgeries.
  • Not cover certain preventive procedures at 100%.

While ACA plans can only vary premiums based on geography, age, tobacco use and number of people covered (single vs. family plan), short term plans can vary rates due to any number of factors, including health conditions.

Insurance With Lower Monthly Premiums

Short term health insurance can provide temporary and limited benefits for a lower premium if you qualify. STM is not a replacement for comprehensive major medical coverage. 

Your parent’s plan – an option until age 26

The ACA allows adult children to remain on a parent’s health insurance plan until they turn 26 years old. This applies whether the parent’s health insurance is obtained through an employer, HealthCare.gov, a state-based exchange, or the private health insurance market.
When is a parent’s health insurance plan the best option for young adults + students?

A parent’s health insurance plan can be advantageous if you are already enrolled in it and need access to comprehensive, affordable, ACA-compliant benefits.

You can remain on a parent’s plan to age 26, even if you are:

  • Married
  • Employed with access to benefits
  • In college
  • Not in college
  • Living at a separate address from your parent(s)

Assess this option

Staying on your parent’s health insurance

Parent’s Plan
Sample Rate (monthly premium) Varies by type
Year-Round Enrollment

Open or special enrollment only

Next-Day Coverage Available
Guaranteed Issue
Provider Choice

Networks Apply

Subsidy Eligible Circumstance dependent

What else is worth knowing?

Just because you can stay on your parent’s health insurance plan doesn’t mean it’s the best option for you. You’ll want to consider the following:

  • Cost – Is your parent’s plan the most economical choice?
  • Subsidy eligibility – Do you qualify for premium tax credits and cost-sharing subsidies if you enroll in your own coverage through an exchange?
  • Provider access – Do you live near in-network providers included on your parent’s plan?

Individual major medical – The Affordable Care Act (ACA)

Individual ACA plans (commonly referred to as “Obamacare”) may cost a little more than temporary health insurance, but they provide the most comprehensive benefits.

If you don’t have access to a parent’s plan or job-based coverage and want guaranteed-issue benefits that include no-cost preventive care services and healthcare services in the 10 essential health benefits, then major medical insurance is your solution.

When is an ACA plan the best health insurance option for young adults + students?

If you qualify for an Obamacare premium tax credit you may want to enroll in major medical insurance through HealthCare.gov or a state-based exchange. Major medical insurance is also available in the private market from a health insurance company or agent; however, these plans are not subsidy-eligible.

Keep in mind, ACA plans are only available at certain times throughout the year. So if it is not the open enrollment period and you don’t qualify for special enrollment, you may want temporary health insurance until you’re able to access major medical coverage.

Assess this option

Health insurance on or away from an ACA exchange

ACA Plan
Sample Rate (monthly premium) $260.183 (unsubsidized bronze plan)

$92.114

Year-Round Enrollment

Open or special enrollment only

Next-Day Coverage Available
Guaranteed Issue
Subsidy Eligible

Only if purchased through HealthCare.gov or a state-based exchange; catastrophic plans excluded

What else is worth knowing?

You may have multiple major medical options.

You could be eligible for a premium subsidy based on your household size and income. See if you could qualify for an ACA subsidy.

ACA Subsidy Calculator

Are you under 30 years old? You may qualify for a catastrophic health insurance plan—availability varies by state and region, and Obamacare subsidies do not apply to catastrophic plans.

Job-based health insurance for young adults

Once you land a full-time job, you may find an employer that offers ACA-compliant group health insurance benefits that are guaranteed issue, which means you cannot be denied coverage.

When is job-based coverage the best health insurance for young adults + students?

When you are employed full-time, and have access to health insurance through your workplace, this is often a desirable route since employers may cover a portion or all of your premium costs. You may be subject to a waiting period before your benefits begin.

Assess this option

Signing up for employer benefits

 Job-Based Plan
Sample Rate (monthly premium) Check with employer
Year-Round Enrollment

initial hire period or employee open enrollment

Next-Day Coverage Available
Guaranteed Issue
Subsidy Eligible

What else is worth knowing?

If you are younger than age 26, you may opt to stay on your parent’s health insurance plan.

Also, those who are 26 and older who have access to affordable employer-sponsored health insurance will not qualify for savings offered through exchange-based plans.

According to HealthCare.gov, “A job-based health plan is considered ‘affordable’ if your share of the monthly premiums for the lowest cost self-only coverage that meets the minimum value standard is less than 9.56% of your household income.”5 If, by these measures, workplace health insurance coverage is not affordable, young adults and others may be able to shop the Health Insurance Marketplace and qualify for subsidies based on income.

Need Temporary Health Insurance?

Lost your job? In a new-employee waiting period? Short term health insurance can help if you have an accident or critical illness when you're between major medical plans.

Medicaid

Medicaid provides low-cost or free health insurance to individuals who qualify. Each state runs its own program, and eligibility criteria varies by state.

When is Medicaid the best coverage option for young adults + students?

If you meet Medicaid eligibility criteria, then Medicaid is likely your best option.

Assess this option

Enrolling in coverage through Medicaid

Medicaid
Sample Rate (monthly premium) Dependent on circumstances
Year-Round Enrollment
Next-Day Coverage Available
Guaranteed Issue Eligibility criteria apply
Subsidy Eligible No- or low-cost dependent on eligibility

What else is worth knowing?

Under the ACA, some states expanded Medicaid eligibility to adults younger than age 65 who earn up to 133% of the federal poverty level. For a single-person household in 2018, that is $12,140.6

Learn more about your state’s Medicaid program.

Student health insurance from your college

Some colleges and universities still offer major medical health insurance plans to their students. These student health plans are typically considered qualifying health coverage that fulfills the ACA’s individual mandate–of course, you’ll want to check with your school’s plan to confirm.7

Learn more about ACA-compliant student health insurance options.

So, what is the best health insurance for young adults?

There is no one, best health insurance option that suits all young adults. Each individual’s health, financial situation, employment status and other life circumstances will determine which healthcare coverage makes the most sense.

Short Term Parent’s Plan ACA Employer Medicaid College
Sample Rate (monthly premium) $94.188 Varies by type $317.119 (unsubsidized bronze plan)

$79.1110 (subsidized bronze plan)

Check with employer Dependent on circumstances Check with school
Year-Round enrollment

Open or special enrollment only

Open or special enrollment only

During new  hire period or employee open enrollment

Check with school
Next-Day Coverage Available
Guaranteed Issue

Eligibility criteria apply

Check with school

Provider Choice

Networks apply

Networks apply

Networks apply

Participating providers

Check with plan
Fulfills Mandate Check with plan
Subsidy Eligible Circumstance-dependent * No- or low-cost dependent on eligibility

*Only if purchased through HealthCare.gov or a state-based exchange; catastrophic plans excluded

Summary + Next Steps

There are 6 common health insurance options for young adults in their twenties, whether or not they are students. They include short term medical insurance, bundled benefits, a parent’s health insurance plan, individual major medical insurance, job-based coverage, Medicaid and student health plans.

Read about more health insurance options related to your situation:

Find short term health insurance rates for young adults. (Get a quote.)

Call 888-855-6837 to speak with a licensed insurance agent about your options.

Find a local insurance agent to work with.

Need Supplemental or Short Term Insurance?

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Footnotes

  • 1 Bain, A., Wong, C., Slap, G., Polsky, D., Merchant, R., Akosa Antwi, Y., Rubin, D. and Ford, C. (2018). Common and Costly Hospitalizations Among Insured Young Adults Since the Affordable Care Act.
  • 2 Sample quote through HealtheDeals.com for 24-year-old female (1/1/1994) living in 85002 ZIP code. This quote is for Connect Value, the short term health insurance plan with the lowest premium available through Healthedeals.com to this hypothetical applicant.
  • 3 Sample quote through HealthCare.gov for a 24-year-old female (1/1/1994) living in 85002 ZIP code. This quote is for Bright Health – Bronze, Plan ID: 87247AZ0010006, the bronze with the lowest premium available through HealthCare.gov to this hypothetical applicant.
  • 4 Sample quote through HealthCare.gov for a 24-year-old female (1/1/1994) living in 85002 ZIP code; household of 1; annual income of $27,000. This quote is for Bright Health – Bronze, Plan ID: 87247AZ0010006, the bronze plan with the lowest premium available through HealthCare.gov to this hypothetical applicant.
  • 5 HealthCare.gov. “People With Coverage Through A Job: If You’d Like to Change To A Marketplace Plan.” https://www.healthcare.gov/have-job-based-coverage/change-to-marketplace-plan/
  • 6 U.S. Department of Health and Human Services. “Poverty Guidelines: U.S. Federal Poverty Guidelines Used to Determine Financial Eligibility for Certain Federal Programs.” Jan 13, 2018. https://aspe.hhs.gov/poverty-guidelines
  • 7 HealthCare.gov. “People Under 30: In School? Student Health Plans & Other Options.” https://www.healthcare.gov/young-adults/college-students/
  • 8 Sample quote through HealtheDeals.com for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 9 Sample quote through INXSCloud for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 10 Sample quote through INXSCloud for 24-year-old female (1/1/1994) living in 85002 ZIP code; household of 1; annual income of $27,000
Get Health Insurance for 2020

Open enrollment is Nov. 1 to Dec. 15, 2019 in most states. Find out if you could qualify for an ACA subsidy.

 

ACA Subsidy Calculator

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