Reaching the age of 26 can be a turning point for many young adults, bringing up a common question: “What will happen to my health insurance?” This is largely due to government regulations. The Affordable Care Act, enacted in 2010, removed the requirement for insurance providers to cover dependents beyond this age.
For those with employer-based plans, coverage usually lasts until the end of their 26th birthday. However, under state or federal plans, coverage typically concludes on December 31 of the year they turn 26. Individuals needing health insurance outside of workplace options can often find plans through state or federal marketplaces.
Interestingly, around 15% of 26-year-olds decide to forgo insurance entirely. This statistic, from KFF, a nonprofit health research organization, highlights the highest rate of uninsured individuals within any age group in the U.S.
Marilyn Cabrera, who manages health policy and advocacy at a national organization for young adults, notes that affordability is a significant factor influencing this choice. She also challenges the assumption that young people are invulnerable because of their health. “Many still face chronic conditions,” she explains, “and nearly half of those without insurance struggle with medical bills.”
The situation could worsen if temporary health insurance tax breaks introduced during the pandemic are not extended. With the ongoing government shutdown, it’s an uncertain time as political parties remain divided.
Predictions from a Washington Post analysis suggest that popular health plans available on Healthcare.gov might see an average increase of 30% in premiums next year.
So, what should young people do to secure health insurance as they approach 26? Here are a few tips.
Can I stay on my parent’s plan after turning 26?
According to Michael Margolis, an insurance broker based in Manhattan, some employers do allow dependent coverage until age 29. In New York, a specific health insurance program offers this option until age 30. Still, after 26, individuals must pay full premiums for their policy.
Also, young adults may have the option to temporarily extend coverage for up to 36 months under a law known as COBRA, provided their parent’s workplace has at least 20 employees.
In New York, even businesses with fewer than 20 employees must provide COBRA benefits to those too old for their parents’ health insurance. This coverage can continue for three years at a cost of 102% of what the employer pays.
Reading through a parent’s plan is crucial, advises Kirat Karode, CEO of a healthcare provider in New Jersey. Some young adults might unexpectedly lose their coverage on their birthday, while others may retain it for a longer time without realizing it.
How can I choose a plan through my employer?
If enrolled in an employer-sponsored plan, it’s essential to discuss options with the human resources department, Karode suggests. Understanding insurance terms—like “copay” and “deductible”—is key to making informed decisions about available options.
What if my employer doesn’t offer a plan?
Karode advises that young adults searching for individual plans should check state resources for available options. In New York, residents can buy insurance online, and some may qualify for low-cost or free options through Medicaid or the Essential Plan based on their income.
Are there resources to help navigate the marketplace?
Health navigators are available both online and in-person to assist young adults as they seek insurance options, Cabrera states. Organizations like Young Invincibles encourage individuals to explore their choices before leaving parental plans. An important phase begins when transitioning away from parental coverage, promoting a smooth switch. However, missing this special enrollment period could mean waiting for the next registration opportunity.
Understanding Healthcare Terms
- A deductible is what you pay out-of-pocket before your insurance kicks in.
- A copayment, or copay, is a fixed fee for visiting a doctor or emergency room.
- Coinsurance is the share of your medical costs you pay, particularly applicable to hospital bills, which can become quite expensive.
- The deductible limit is the highest amount payable by an individual yearly, assuming utilization of in-network services and completion of the deductible.
