I’m under 26. Should I get coverage through my school, buy my own plan, or use my parents’ health insurance?
There is no one answer to this question that will cover every person in every situation. You will need to compare the costs, benefits, and potential drawbacks of all three options to see which is the best choice for you. When making calculations like this, keep in mind that the size of your premiums is not the only thing that matters – you will also want to take deductible, copays, coinsurance, and out-of-pocket maximum into account, even if you do not think that you will incur any significant medical expenses over the next year. If you’re not sure where to start, we offer plenty of articles and resources to help you compare the costs and benefits of various plans. Here are some tips and basic information to keep in mind when comparing your options:
You can continue to receive coverage through your parents’ plan until you turn 26, regardless of whether they claim you as a dependent on their taxes or whether you file your own. If your main concern is whether it is cheaper to stay on their plan or get your own, you will need to find out whether they are paying increased premiums to keep you on their plan. If the plan was purchased through a workplace, having dependents on it may or may not impact premiums. If it was purchased through the exchange, having a dependent on the plan will always increase the premium if that dependent is over 21. If you are under 21, whether or not having you on the plan impacts the premium will depend on how many other dependents under 21 are covered.
Your parents’ plan may also have certain limitations that you should be aware of. If you’re married, your spouse may not be able to receive coverage under your parents’ plan. The plan may also not cover maternity care for dependents. If you are going to school in a different state or have gotten a job and moved out, you may also run into problems finding doctors and hospitals in your area that are part of the plan’s network. If any of these are likely to be a concern for you, you may want to opt for a student health plan or an individual plan purchased through the exchange instead.
Student health plans available through schools are similar to regular plans and comply with most of the rules set forth by the Affordable Care Act – you cannot be turned down because of a pre-existing condition, all 10 ACA essential health benefits are covered, and there are no annual or lifetime benefit caps. However, unlike plans available on the exchange, you cannot apply subsidies to student health plans. This means that even if you would have qualified for a premium subsidy on the exchange, you will need to pay the premiums on your student plan in full.
If you’re looking to take advantage of subsidies, you will want to purchase your own plan through the exchange – just keep in mind that eligibility for subsidies is based on the size and income of your household. If your parents still claim you as a dependent on their taxes, they will be included as part of your “household” even if you are not currently living with them, and this can impact your eligibility. The size of the subsidy you receive will also depend on the price of plans in the area where your plan is purchased, and this can vary significantly from one area to another.
Choosing to purchase a policy off the exchange also means that you will need to keep track of open enrollment, which is the only time of the year when you can purchase a new plan unless you experience an event that triggers a special enrollment period. Moving to a new area, including going away for college, counts as a qualifying event, so you can select a new plan at that time if the normal enrollment period is not currently open.
If you file your own tax returns and live in a state with expanded Medicaid, you might also qualify for Medicaid coverage. Whether or not you are eligible will depend on your income. One of the easiest ways to see whether or not you are Medicaid-eligible is to enroll in the exchange during open enrollment in November/December. Once you have entered information about your household and income, you will automatically be directed to the plans appropriate for your income, including Medicaid.
What happens if I have to get care from an off-network health insurance provider?