What 26-Year-Olds Need to Know About Insurance
When you’re young and on your parent’s insurance plan, it’s natural to be naive about how insurance works. However, once you turn 26, you’re often either uninsured or figuring it out for the first time. If you already have prescriptions or need to visit a doctor, this transition can be complicated and stressful, but it doesn’t have to be. Read this article to learn what you need to know about insurance.
Know Your Needs
Define what your healthcare needs are today and what they may be soon. For a healthy young adult, preventative care services and lower premiums may be your priorities. Conversely, managing a chronic disease can greatly influence what is important to you. Options including access to more specialists, better prescription coverage, and a lower deductible may be deciding factors.
If you have ongoing healthcare needs, ask your providers what insurance plans they participate in. Medical records and prescriptions can be transferred if you do have to start seeing a different provider. It is good to include any highly probable life events on the horizon in your plan choice. You may want to consider the cost of and process for adding family members.
It is also essential to think about the types of prescription medications you take regularly. For example, birth control may be the only prescribed medication a woman in her 20s takes daily. In contrast, a young adult with diabetes and asthma may require insulin, test strips, inhalers, and oral steroids. Ask about prescription coverage and what is included on the plan’s formulary list.
Understand the Differences in Network and Plan Types
Many people get their health insurance from a plan offered by their employer. These plans typically have lower premiums, but your choices may be limited. If coverage through work isn’t an option, you can enroll in an Affordable Care Act (ACA) Marketplace plan. The ACA choices are categorized into four cost-sharing plans to fit your needs.
All health insurance plans utilize some type of provider and facility network. Exclusive provider organization (EPO) and health maintenance organization (HMO) options only cover services through in-network providers and facilities. Emergency services are an exception and are always covered regardless of network.
Point of service (POS) and preferred provider organization (PPO) networks pass along the discounted costs when you use an in-network provider or facility. A big difference between POS and PPO plans is how you access specialized care. In a POS plan, you are required to have a referral from your primary care provider to see a specialist. This is not a requirement in PPO plans.
Know How Much Will You Pay
A critical factor in selecting a plan is what you can expect to pay including premiums, deductibles, and co-pays. A premium is a set amount that you pay on a bi-weekly, monthly, semi-annual, or annual basis. Think of premium as the base cost for having the plan. It typically covers the cost of preventive care office visits, screenings, and vaccinations.
Most health insurance plans also have a deductible you must meet each year before your carrier begins to pay any of your medical bills. For example, if your plan has a $1,500 individual deductible, you will pay the first $1,500 in medical bills out-of-pocket. Once your deductible is met, your carrier will begin paying all or a percentage of additional costs.
Copays are another part of your total health care expenses. Plans typically have co-pays for primary care, specialists, urgent care, and emergency room visits. Costs vary by provider or facility visit. Prescriptions often have copays, but they can be easily transferred to your new insurance plan. Generic brands are often less expensive, as many patented medications have higher co-pays.
Don’t Forget Dental and Vision Insurance
Dental and vision plans are separate from your medical insurance policy. Like health insurance, these plans utilize managed care networks and have a premium. Most employers offer dental and vision coverage in addition to medical plans. If coverage through work isn’t an option, you can still enroll in dental and vision plans.
Dental plans cover standard preventative services including cleanings, x-rays, and checkups. Other services such as crowns, fillings, and bridges are covered at a lesser percentage. Dental plans typically have a deductible and a maximum dollar amount per person each year. When you reach the maximum coverage amount, you are responsible for any additional costs.
Vision plans provide coverage for preventative care, which usually includes annual eye exams, screenings, and vision tests. Expect to pay a small co-pay for these services. These plans provide you with a yearly allowance for eyeglass frames, lenses, and contact lenses as well. However, you are responsible for the cost remaining after the allowance is applied.
Navigating the world of health insurance may seem intimidating, but it doesn’t have to be. Understanding the basics gives you the foundation for taking your next step into adulthood. Get started by assessing your health needs, budget, and plan options. The steps you take toward getting a policy today can greatly impact your health in the future. The preventive care services and screenings provided by medical, dental, and vision plans can save your life.