I’m young. I’m healthy. Do I need health insurance?
The answer is “probably yes,” even though there’s no longer a federal tax penalty if you don’t have minimum essential coverage.
Since health insurance is no longer required, if you don’t have employer-provided health insurance, how do you decide if ACA-compliant health insurance, or any health insurance at all, is worth the money?
There are a number of questions to consider when making your decision:
- Do you have a pre-existing condition?
- What’s the likelihood you may develop a chronic illness?
- How much value do you place on preventive care?
- Can you afford to pay for services 100% out of pocket?
- Do you have children or other dependents?
- Could you be eligible for lower premiums or subsidies for major medical insurance?
Ready to get health insurance? Learn about the best health insurance for young adults.
Still trying to decide if you need health insurance? Keep reading as we’ll go into detail on some of the most important considerations when deciding if health insurance is worth it or not.
Could you develop a chronic illness?
Thinking about skipping health insurance because you’re “young and healthy?” Not so fast! Consider this: one in six young adults has a chronic illness such as cancer, diabetes or asthma.
In fact, a 2013 report from researchers at Harvard Medical School found that children and adolescents are increasingly suffering from elevated blood pressure, one of the first signs of a number of chronic health conditions that normally don’t appear until middle-age.
Treatment of these chronic illnesses, many of which are also considered to be pre-existing conditions, are covered by ACA-compliant major medical plans. The ACA currently prohibits insurers from charging higher premiums to people with chronic illnesses, even though they will likely need more treatment than the average insurance consumer.
Do you have early signs of a chronic health condition like pre-diabetes or elevated blood pressure? Does your family have a history of chronic diseases like heart disease or cancer?
If so, you could be at an increased risk for developing a chronic illness and may need more healthcare than the average person, as well as a comprehensive major medical insurance plan that includes coverage for pre-existing conditions and won’t charge more due to your family’s health history.
How much value do you place on preventive care?
Beyond the big financial risks of an accident or illness, not having insurance could also affect your day-to-day health. If you’re paying for your own healthcare, you may be tempted to make short-term healthcare choices based on money — or worse, you may have no choice at all.
One in five uninsured adults in 2017 went without needed medical care because of the cost. And studies show that if you don’t have insurance, you are less likely to receive preventive care and services for major health conditions and chronic diseases.
In 2017, uninsured adults under 64 were more than three times as likely as adults with private health insurance to say that they postponed or did not get a needed prescription drug due to cost.
Health insurance can help address problems before they get serious — and seriously expensive. Routine annual physicals, immunizations, tests and screenings can help alert you to medical conditions in their early stages, when the cost, ease of treatment and potential for successful outcomes are all better.
If preventive care is a priority for you, you’ll want to consider an ACA-compliant major medical plan that offers free preventive care, including annual physicals, vaccines and other important services without additional out-of-pocket cost.
Budgeting – Can you afford to pay for services 100% out of pocket?
High insurance costs are still the main reason that adults under 64 remain uninsured. But while healthcare insurance can be expensive, it effectively puts a cap on what you will have to spend on medical services in a year.
Even if you don’t use it much during a given year, your health insurance policy may provide peace of mind as well as protection from debt or bankruptcy after a serious illness or injury.
Even young, healthy people can get sick or injured, and the costs can mount quickly.
- A broken leg from skiing, cycling, or playing sports costs an average of $7,500 without insurance. A three-day hospital stay can cost as much as $30,000.
- Multiple sclerosis (MS) (one of the seven most common autoimmune diseases in young adults) and can mean thousands of dollars a year in prescription costs alone. According to a 2015 study the cost of some medications for treating MS increased from between $8,000 to $11,000 annually in the 1990s to approximately $60,000 a year in 2015. A 2015 study found that Newer MS drugs can cost even more.
Do you have debt? Don’t forget to factor in consumer debt like student loans and credit card balances when you think about protecting your finances.
The average person under 35 was carrying around $67,000 in debt in 2016, primarily in the form of mortgages and student loans. Adding medical debt on top of that could be difficult, especially for someone who may be at the beginning of their career and/or starting a family.
So, how much do you really need in a medical emergency fund? A good start is at least $100 a month to cover costs like doctor’s office or urgent care visit and medications. Because you don’t know if you’ll experience an emergency and if so, what the seriousness and associated costs could be, it’s impossible to know how much savings you need.
Which is more within your reach financially? The health insurance premiums and annual deductible or saving as much as $60,000+ to cover all of your medical costs fully out of pocket?
Check out this budget calculator to see how to include a medical emergency fund into your financial plan.
Health insurance can act as a financial safety net to keep expenses in check. This safety net is even more critical when you’re talking about coverage for a family, which we’ll talk about shortly.
Will you pay more as an insured or uninsured patient?
If you’re still wondering whether paying your own bills will ultimately be cheaper than paying for insurance, you should know that healthcare providers can charge uninsured people more than they charge an insurance company. Why? Insurers have the leverage to bargain, individuals don’t.
In fact, a 2017 Johns Hopkins study of medical bills showed that U.S. hospitals typically charge uninsured emergency room patients four times what they charge Medicare for the same service. According to the study, a:
- $100 treatment in the emergency room can cost uninsured patients up to $1,260.
- $34 electrocardiogram can cost uninsured patients $62 if it was read by an internal medicine physician and $96 if it was read by an emergency department physician.
Until cost-controlling measures and price transparency is in place for health services providers, it’s generally a safe assumption that you’re paying a lower rate for medical services as an insured person than an uninsured person.
Do you have a family or other dependents?
Do you have children or other people depending on your health and financial support? If so, it’s even more important that you have health insurance.
If you experienced a medical crisis without health insurance, the situation could be even worse news for your family. Without health insurance kicking in after you’d met your out-of-pocket costs, the medical bills could become a risk to your family’s financial security.
Plus, not having health coverage can affect your child’s health now and when they reach adulthood:
- Health insurance improves a child’s access to preventive care such as well-child visits, immunizations and prescription drugs.
- Health insurance is linked to social and emotional development with uninsured children nearly 1.5 times more likely to have missed a hearing and/or vision screening
- Insured children are less likely to miss school, and they are more likely to have better economic and educational outcomes when they grow up.
- Uninsured children are ten times more likely to have an unmet healthcare need than insured children.
Will you be eligible for lower premiums or subsidies?
Single or married — with or without a family — your age can work in your favor when buying major medical health insurance. The younger you are, the lower your premium.
In most states, the base rate for a healthcare plan is calculated for a 21-year-old policyholder. Rates go up as a you get older, with the largest increases coming after age 50.
Sample Silver plan premiums
|Age||Silver Plan Premium|
Plus, like many younger adults, your annual income may be near the lower end of the scale. While that will hopefully be a temporary situation, one upside is that you may qualify for a subsidy toward your health insurance.
Under the ACA, those that earn up to 400% of the federal poverty level qualify for a premium subsidy. In 2019 that means that the following income thresholds qualify:
- Individuals with an income under $48,500
- Families of four with a household income under $100,400
Eligibility requirements vary depending on where you live, and if you’re the only person in your taxable household.
Use the ACA Subsidy Calculator to find out if you might qualify for a subsidy and if so, how much.
How Much Coverage Do You Really Need?
You don’t visit the doctor very often but want preventive care
If you’re generally healthy, without a pre-existing condition or precursor to a chronic illness, but still want to take advantage of preventive care and enjoy the peace of mind that comprehensive coverage provides, you’ll need ACA-qualifying major medical insurance.
Consider a lower-premium major medical bronze plan paired with a supplemental gap insurance plan. Like all major medical insurance, bronze plans cover preventive care and the other essential health benefits but because they have lower premiums, bronze plans generally have higher deductibles.
That means when you do need other medical services, you’ll pay more out-of-pocket before your plan’s coverage kicks in.
Medical gap insurance is a form of supplemental health coverage. These plans are not ACA-qualifying plans but are meant to be paired with them. They can help you afford your out-of- pocket costs (like high deductibles) by providing a fixed, lump sum benefit for covered accidents or illnesses. Find out how much a gap plan would cost you by getting an electronic quote.
Catastrophic plans: If you’re a healthy person younger than 30, you might also consider a catastrophic health plan. Learn more about eligibility requirements and how to enroll in a catastrophic health plan.
You regularly visit the doctor or are managing a chronic health condition
If you’re managing a chronic condition that requires regular healthcare services and/or prescription medication, consider a higher premium/lower deductible ACA-qualifying major medical plan (i.e., gold or platinum).
Remember, all major medical plans cover the same services. The difference between the metal levels is in how much you’re paying in premium compared to deductible.
Between co-pays, prescription costs and potential additional treatments such as testing and physical therapy, you’ll likely reach your annual deductible amount earlier in the year on a gold or platinum plan and can take advantage of your insurance benefits sooner.
You want a bare-bones plan that may only cover some emergencies
If you don’t find value in the additional benefits and protections that major medical plans include by law, and want to pay less in monthly premium for less coverage, you can consider a short-term health insurance policy.
Short term health insurance may be able to be used to help pay for unexpected medical bills relating to:
- Hospital room, board and general nursing care
- Emergency room visits
- Inpatient doctor visits
- Doctor office visits
- Surgical services
- Intensive or specialized care
You may also want to explore short-term coverage if you are between ACA plans due to:
- Being in an employer waiting period
- Missing the health insurance open enrollment period
- Being ineligible for a special enrollment period
Short term plans do not cover pre-existing conditions and don’t include services such as preventative care. They are not considered ACA-qualifying coverage, are not guaranteed issue. Policy duration limits vary by state and these types of policies are not available in all states.
Find out how much a short-term medical health plan could cost you if you qualify.
Summary + Next Steps
Investing in health insurance is a responsible decision and may provide peace of mind.
Call (888) 855-6837 to speak to a licensed agent or get an instant quote (below) to learn more about costs, eligibility and coverage options.