(Best) Health Insurance for Young Adults

Jenifer Dorsey
2018-09-20 September 5th, 2018 |
Read time: 10 minutes

7 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. Bundled Benefits: alternative insurance products combinations for a range of healthcare services; fixed-dollar benefits for hospital, surgical and critical illness care
  3. A Parent’s Health Insurance Plan: coverage until age 26
  4. Individual Major Medical: an ACA-compliant option that may include access to catastrophic plans and subsidies
  5. Job-Based Coverage: major medical insurance through an employer
  6. Medicaid: a low-cost or no-cost option for those who qualify
  7. 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.

Looking for immediate help? Call the number on your screen to speak with an agent from Health eDeals, or use Agent Finder to search for a local licensed health insurance producer (i.e., agent or broker).

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 90 days 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.

Ready to get right to a short-term health insurance quote? Start here.

While short-term insurance plans are most helpful when you need medical care for an injury or sudden illness, you can find some plans, such as Connect Plus (available through this website) that include benefits for certain pre-existing conditions—medical conditions that exist before you begin coverage through a new health insurance policy.2 Some temporary plans also include a few basic preventive services or optional doctor office visit coverage; you’ll want to read plan descriptions and details.

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) $94.183
Year-Round Enrollment
Next-Day Coverage Available
Guaranteed Issue
Provider Choice
Fulfills Mandate
Subsidy Eligible

What else is worth knowing?

Short-term plans:

  • Provide quick benefits. You can quote and enroll within minutes. If approved, coverage can begin as soon as the next day.
  • Allow you to choose your healthcare provider.
  • Are not minimum essential coverage.
  • Don’t include the 10 essential health benefits or no-cost preventive care, as required by the ACA. However, you may find a plan such as Connect Plus, which includes limited benefits for some pre-existing conditions.

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.

Compare the pros and cons of short-term health insurance.

Bundles: Short-term + hospital indemnity combination plans for young adults

Short-term health insurance covers high-dollar claims for covered expenses by providing a maximum benefit up to $1 million or $2 million. That way, if you become seriously ill or injured, you know you are covered.

But what about benefits for less expensive care? That’s where a hospital indemnity insurance plan can help lessen the impact of out-of-pocket healthcare expenses related to things like hospitalization and surgery. Hospital indemnity insurance plans, which are also called fixed indemnity plans, pay specified benefit amounts for a set duration (e.g., per day, per week, per month, per visit, per event). The fixed amount is paid regardless of the expense incurred.

When you enroll in bundled coverage, you gain access to benefits for high- and low-dollar claims.

When are bundled benefits the best health insurance for young adults + students?

A bundle such as Fusion and Fusion STM can be helpful if you:

  • Don’t have access to major medical through a parent
  • Aged off your parent’s health insurance plan
  • Are temporarily uninsured and want to keep the hospital benefits after you enroll in a major medical plan (Fusion plan only)
  • For any reason find yourself between health insurance plans outside of open enrollment and don’t qualify for special enrollment

Assess this option

Bundling short-term medical with a hospital plan

Short-Term Medical
Sample Rate (monthly premium) $131.574
Year-Round Enrollment
Next-Day Coverage Available
Guaranteed Issue
Provider Choice
Fulfills Mandate
Subsidy Eligible

What else is worth knowing?

If you’re a college student who is attending school outside your parent’s health plan network, you may opt out of your parent’s health plan and chose an alternative health insurance option such as the Fusion bundle—no network requirements apply. This is also an option for young adults under age 26 who are not in school and live outside their parent’s plan network.

Learn more about the Fusion bundle through Health eDeals. Call the number on your screen for a quote.

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

Fulfills Mandate
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?

Thinking about alternatives? Consider short-term health insurance.

Individual major medical – The Patient Protection and 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 and qualify as minimum essential coverage that fulfills the individual mandate.

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.

Compare Obamacare and short-term health insurance plans.

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

If you’re not exempt from the individual mandate, know you’ll be uninsured for longer than 90 days, or qualify for an Obamacare premium tax credit, you may want to enroll in major medical insurance through HealthCare.gov, a state-based exchange, or in the private market from a health insurance company or producer (i.e., licensed health insurance agent or broker).

Keep in mind, Obamacare plans are only available at two times:

  1. During the annual open enrollment period—open enrollment for 2019 coverage runs from November 1 through December 15, 2018
  2. If you qualify for a special enrollment due to life events such as getting married or having a baby—special enrollment periods typically last 60 days from the qualifying event.

Learn more about special enrollment periods.

Assess this option

Health insurance on or away from an ACA exchange

Obamacare Plan
Sample Rate (monthly premium) $317.115 (unsubsidized bronze plan)

$79.116 (subsidized bronze plan)

Year-Round Enrollment

Open or special enrollment only

Next-Day Coverage Available
Guaranteed Issue
Fulfills Mandate
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.

  1. You could be eligible for a premium subsidy based on your household size and income. Estimate your subsidy with our Health Insurance Cost and Subsidy Calculator.
  2. If you’re under 30, you may qualify for a catastrophic health insurance plan—availability varies by state and region, and Obamacare subsidies do not apply to catastrophic plans. Learn about catastrophic health insurance options for young adults.

Job-based health insurance for young adults

Once you land a full-time job, most employers are required to offer you ACA-compliant health insurance benefits. Group medical plans are subject to the same requirements as individual major medical plans sold on and away from the Obamacare exchanges. That means they’re guaranteed issue, include the 10 essential health benefits, and cover preventive care services as outlined by the ACA.

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
Fulfills Mandate
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.”7 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.

Find out why to enroll in short-term health insurance during your employer’s waiting period.

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 other coverage options are not available to you, and you meet Medicaid eligibility criteria, then Medicaid may be the right choice.

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
Fulfills Mandate
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 $12,140.8

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.9

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 Fusion Parent’s Plan Obamacare Employer Medicaid College
Sample Rate (monthly premium) $94.1810 $131.5711 Varies by type $317.1112 (unsubsidized bronze plan)

$79.1113 (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 7 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.

For immediate help, contact us.

Search for local assistance.

 

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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 HealthCare.gov. “Pre-Existing Condition.” https://www.healthcare.gov/glossary/pre-existing-condition/
  • 3 Sample quote through HealtheDeals.com for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 4 Sample quote through HealtheDeals.com for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 5 Sample quote through INXSCloud for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 6 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
  • 7 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/
  • 8 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
  • 9 HealthCare.gov. “People Under 30: In School? Student Health Plans & Other Options.” https://www.healthcare.gov/young-adults/college-students/
  • 10 Sample quote through HealtheDeals.com for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 11 Sample quote through HealtheDeals.com for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 12 Sample quote through INXSCloud for 24-year-old female (1/1/1994) living in 85002 ZIP code.
  • 13 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