A Millennial’s Guide to Health Insurance

Understanding health insurance requirements and terms can be confusing for many people, especially young millennials in their 20s trying to figure out how to best insure themselves for the first time. By conducting careful research and seeking help from resources, you can work toward choosing a health insurance plan in your 20s. 

Cutoff Age for Health Insurance 

Under President Obama’s Affordable Care Act (ACA), you can stay on your parent’s health insurance plan until you reach 26. Regardless of your marital status, parental status, education level or tax bracket, you are eligible to use your parent’s health insurance until your 26th birthday — you can even live away from home or study at a university during that time. It is important to have a policy lined up to continue receiving healthcare coverage after turning 26. 

Health Insurance in Your 20s 

When choosing a health insurance plan, you need to know what you are paying for. Many studies have determined that Americans generally have little understanding of their health insurance plans — in one survey, 56% of respondents admitted to feeling lost when trying to understand their health insurance. Further, 52% of people stated that they were most confused about deductibles. 

As millennials begin to come off their parents’ insurance plans and start searching for their own, they must understand terms used in health insurance policies, including: 

  • Premium: A premium is what you pay monthly to maintain your health insurance policy. Premiums can change depending on various factors, like age and location. The average premium for ages 18 through 24 is around $280 and $330 for ages 25 through 34. 
  • Deductible: A deductible is how much your insurance provider expects you to pay before it covers costs. For example, if you have an insurance policy with a $1,000 deductible and receive a $2,000 medical bill, you will need to pay the first $1,000 before your insurance provider can cover the rest of the bill. 
  • Copayment: Many insurance companies require you to pay a copay when receiving medical services, especially for doctor’s visits or prescription medications. You will usually pay the same amount every time, and many plans offer different copay rates so you can find one to best fit your needs and budget. 
  • Coinsurance: When you sign up for a health insurance plan, you will agree to pay for a percentage of your medical services after your deductible, and your insurance provider will pay the remaining amount. Your portion will often relate to your premium rate — the higher your premium, the lower your coinsurance, and vice versa. 

Understanding the terms included in health insurance policies is critical for getting the right health insurance for you. When you know your policies requirements, you can ensure you choose the plan that will fit your needs and budget. 

Choosing a Health Insurance Plan for Your 20s 

It can be challenging to know what you need when searching for your first health insurance plan in your 20s. Most millennials don’t need extensive or comprehensive health insurance plans to meet their needs. Properly assessing your needs and identifying the right insurance tier can help you maintain your budget and protect your health. 

Many health insurance professionals recommend a catastrophic health insurance plan for people in their 20s. A catastrophic plan provides essential medical coverage to emergency and preventative healthcare services, which can help protect you in the case of extreme illness and accidents. Since younger people tend to be healthier, this can help meet their basic needs while protecting them from the unexpected. Further, rates for catastrophic coverage average around $195, making them more affordable than other plans. 

A catastrophic plan might be too little for you because everyone has different needs. Other healthcare tiers include: 

  • Bronze tier: You can receive basic healthcare coverage with lower payments at this tier. This tier can be ideal for millennials who want more coverage than what’s available in catastrophic plans but don’t want to pay too much. 
  • Silver tier: If you still want more coverage than the bronze tier provides, you may consider silver. This tier will require higher premiums but with a tradeoff of lower deductibles. Depending on your income and needs, this tier might be perfect for you. 
  • Gold tier: Consider the gold tier for a simple, comprehensive health insurance plan. Your policies will cover more services at this tier, making it great for people with more extensive needs. You will have high premiums to pay at this tier, but your reward is paying lower expenses yourself for medical services. 
  • Platinum tier: This is the highest health insurance tier with the most comprehensive plan. You can get the most coverage at this level, making it great for people who need access to more services. This level has the highest premiums, but you can have little to no expenses that you will need to pay out of pocket. 

Knowing what amount of medical services you need can help you determine where you fall on the health insurance scale. While most people in their 20s are healthy and fit, plenty of young people live with chronic illnesses and require more care and medical assistance than others. Some young people even have families and children they need to care for. Regardless of your situation, there is a perfect health insurance plan for you. 

How to Enroll in Health Insurance 

You have many different options when enrolling in health insurance. Most full-time jobs will offer health insurance plans to their employees with a specific provider. Most people choose to align with their employers for ease of access and any benefits they might provide. 

You have two options to purchase health insurance elsewhere. ACA hosts an open enrollment period each year, where you can buy health insurance through their government-run database called Health Insurance Marketplace. Or, you can buy directly from specific health insurance providers. 

ACA has minimum standards for health insurance providers, which all companies must legally uphold. The open enrollment period allows you to explore additional coverage, benefits and various rates so you can find a program that best fits your needs. 

While open enrollment is the only time you can buy health insurance, you can switch providers throughout the year due to changes in employment, marital status, parental status and which state you live in. These are considered qualifying life events, and turning 26 counts as one, as well.

Request a Free Health Insurance Quote From Health for California 

As you move toward your 26th birthday, begin research early so you can smoothly transition from your parents’ health insurance to your own. Researching different rates and coverage policies can help you determine what you will need moving forward, based on your medical needs and budget. 

At Health for California, we can help match you with the right health insurance plan. With readily available agents who understand the different tiers, providers and application processes, we can assist you with any questions or issues you may face as you work toward insuring yourself. Request a free quote today from Health for California and let our agents help you navigate the world of health insurance. 

Not sure how Obamacare affects your health care plans in California? Learn how the ACA works in California, including benefits, costs and enrollment.

Covered California is the Golden State’s official health exchange marketplace where individuals, families and small businesses can find high-quality, low-cost California government health insurance.

Learn about Obamacare income guidelines in California using our income limits chart, and see if you’re eligible for government assistance.

Learn about the Covered California website. Find easy online enrollment. Set up your account, log in, buy insurance and more on the California health marketplace website.