Your options as a Millennial to get health insurance at the lowest possible price

You can’t seem to escape hearing about this in the news and online…Healthcare. Dum Dum!! Some say it’s going great and it’s affordable, others claim it’s out of control and getting more and more expensive. Who’s right?

Depends on who you talk to and what political side of the fence you sit on.

I’m not going to jump into a political argument as there’s plenty of loud and proud websites and TV channels you can plug into and get your fix. Instead, let’s talk about something specific: What are you options?

The deadline to sign up for Healthcare coverage is the end of January. Since the Affordable Care Act came into play last year, it is now required to have health insurance or you get hit up for a fee. Penalty is EITHER 2.5% of your income, or $695 per adult and $347.50 per child up to $2,085.

Pretty steep penalties! Yuck!

Of course, there are some exemptions in place, but I won’t go into too much detail, but check out Nerd Wallet’s link above to get those.

The key worry everyone has is 2-fold:

  1. How much is my monthly premium going to be?
  2. How much does it cover?

The premium is what you pay each month to have insurance. Rule of thumb is the lower premium you pay, the “less” coverage you get if something crazy bad happens. Makes sense.

Your Options as a Millennial for Health Insurance:

1. If you’re under the age of 26, you can stay on your parents: This is becoming a more popular option for penny-pinchers. You have the option of enrolling on the exchanges, with your employer or with Mom and Dad. More and more millennials are moving back in with their parents to save money , so health insurance makes sense as well…..You love me Mom and Dad, right?…

2. Get insurance through your job: This is a common thing to do and usually the cheapest. They can take care of all the details and usually will deduct from each of your paychecks. What many are running into is employers are slowing dropping health coverage, or cutting back hours to the extent where an employee doesn’t qualify (part-time). Providing group health insurance is not cheap so fight to get to the qualification point because after that, the options get expensive…

3. Hit Up the Exchanges: You probably heard about the Healthcare.gov website debacle of ’14. If that’s the only time you’ve heard about it, you probably are already covered by steps 1 + 2. If you’re pulling up the exchanges for insurance, it probably means you are looking for an individual or family plan. Your costs are going to go up.

See, group insurance is like Groupon, a bunch of people put in money and so the insurance company gives a discount. With individual plans, there’s more risk for the insurance company because you could be a Ticking Time-Bomb waiting to explode and need to go the ER every week. Obviously, the insurance company would want to spend Less and Less on this, so they hedge bets by raising the premiums.

With the exchanges, you submit an application (usually takes a good 30 minutes), after which you get pulled through to select a plan from a variety of plans ranging from Catastrophe to Platinum coverage. As you can image, Catastrophe (great name….) is bottom-of-the-barrel coverage to protect against a crazy..well. Catastrophe.

Tip: When you are filling out the application, you’ll be asked about your “INCOME.” Most people, myself included (shamefully) just put in what their salary is for the year and go. This is NOT correct. Put in your Adjusted Gross Income (AGI). To get this number, look at your prior year tax returns AGI and adjust for any new events (raise, new child, new home etc.)

This is important, because your tax credit and subsidy depends on this INCOME number.

4. Go Private, Go: Many of the private insurers you’ll find on the Exchanges; however, it never hurts to get an expert on the line and talk through the different circumstances. This stuff is complex as Heck so it never hurts to go over it with a professional. I would guess, if nothing changes, your premiums per month will be similar, but you never know what you might’ve overlooked!

Of course, as Millennials, some of us now have kids, spouses and the like dependent on getting insurance too (dogs don’t count). This throws a whole new wrench in the equation as you try and figure out if all should be on 1 plan, or a mix of the bunch.

This is why calling up one of the big Healthcare places (Cigna, UnitedHealthcare, Blue Cross Blue Shield, Oscar (a new startup)) may be beneficial to just get an expert’s take on the plan of action.

Also, before signing up for a plan, make sure, if you already have a great doctor, to check if they are in your plan. On top of that, see if your local hospital is “in-network” in case of any need for an ER, you aren’t going to stung with a huge insurance bill!

Send me an email at olivia@oliviatalksfinance.com and let me know if your tips for saving on premiums and healthcare. It’s a rising cost that’s biting into our incomes, so all tips are welcome! Or comment below.

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