As a young adult, you have a lot on your plate – building your career, paying off student loans, and possibly starting a family. Amidst all this, you might think purchasing health insurance is an added expense you can do without. However, health insurance is a critical investment to safeguard your financial stability and physical health.
In this article, we will explore why health insurance matters for young adults and how it can protect you, save money, and provide peace of mind.
The Risks of Being Uninsured
One of the biggest risks of being uninsured is the financial burden of unexpected health problems. A minor medical issue can quickly become an overwhelming expense, especially without insurance.
For instance, a simple visit to the emergency room can cost thousands of dollars. Likewise, a hospital stay for surgery or an injury can result in an enormous debt that can take years to pay off. Furthermore, young adults are more likely to engage in risky behavior that can result in health problems, such as substance abuse, car accidents, and sports injuries.
Affordable Care Act (ACA) and Young Adults
The ACA has been a game-changer for young adults, especially those just starting their careers or pursuing higher education. Before the ACA, many young adults were vulnerable to costly medical bills and potential financial ruin by being excluded from their parent’s coverage.
However, the ACA has changed all that by allowing young adults to remain on their parent’s health insurance plan until they turn 26. This provision has been instrumental in providing young adults access to affordable healthcare, reducing the stress of worrying about healthcare costs.
Furthermore, the ACA provides subsidies for low-income individuals, making health insurance more affordable for those who need it the most. These subsidies are based on income and household size to help lower the cost of monthly premiums and out-of-pocket expenses for eligible individuals, providing relief for young adults who may be working entry-level jobs.
Health Insurance Options for Young Adults
When it comes to insurance for young adults, they have several options. The three most common types of health insurance plans are HMOs, PPOs, and HDHPs.
HMOs, or Health Maintenance Organizations, are popular among young adults due to their affordability. HMO plans typically have lower monthly premiums, but they have more restrictions on which doctors and healthcare facilities you can visit. For example, with an HMO, you must choose a primary care physician to manage your healthcare and refer you to specialists when necessary. HMO plans also require pre-authorization before seeking medical care, which can be a hassle.
PPOs, or Preferred Provider Organizations, offer more flexibility. With a PPO, you can visit any doctor or healthcare facility you choose, but you’ll pay more out-of-pocket for out-of-network providers. PPO plans tend to have higher monthly premiums than HMOs but may be better if you want more flexibility in choosing your healthcare providers.
HDHPs, or High Deductible Health Plans, are newer health insurance plans. These plans come with lower monthly premiums but require paying more out-of-pocket before your insurance kicks in. HDHPs are a good option if you’re healthy and need no medical care. However, if you have a chronic health condition or anticipate needing medical care regularly, an HDHP may not be the best choice.
It’s essential to consider your healthcare needs and budget when choosing a health insurance plan. Healthy young adults who don’t need much medical care may opt for an HMO or HDHP plan with lower monthly premiums. But those who need medical care regularly or want more flexibility in choosing their healthcare providers may opt for a PPO plan. It’s always a good idea to compare plans and read the fine print before deciding.
Cost Savings with Health Insurance
Health insurance can help young adults save money in several ways. First, most health insurance plans cover preventative care services such as annual physicals, vaccinations, and cancer screenings. Preventive care can help identify potential health issues before they become serious and expensive. Secondly, health insurance can protect young adults from financial ruin in a catastrophic health event, such as a serious illness or injury.
Lastly, having health insurance can help young adults avoid the penalty fee associated with the individual mandate provision of the ACA, which requires Americans to have health insurance.
Health insurance is a necessary expense for young adults. Not only does it keep you protected in the event of unexpected health problems, but it can also help you save money by covering preventative care services and protecting you from financial ruin. Remember to choose a health insurance plan that fits your budget and healthcare needs. Ultimately, you invest in your future by prioritizing your health and investing in health insurance.