Health Insurance: What Are My Options?

Who Needs Health Insurance? 

You.  You need health insurance.  You might be young and healthy and sure nothing could ever happen to you, but things do, and medical care is expensive. Break your leg playing recreational soccer?  It could cost you up to $7,500.  Have an emergency and need to stay in the hospital for three days?  Could be $30,000.  Get cancer or some other disease?  We won't even go there.  Medical debts are the number one cause of bankruptcy in the U.S. , even now in 2017.  Oh yeah, you also need health insurance because it's the law, and if you don't have health insurance, you'll be forced to pay a fine.

How Do I Get Health Insurance? 

1. Mom and Dad

Are you under 26?  Under the current laws, you might be eligible to stay on your parents' policy.  Talk with your parents, see what type of coverage they have, and if they're willing to keep you on their policy. If you live with a grandparent or other legal guardian, it's possible you can stay on their policy as well.

2. Employer-Sponsored Plans

Does your job or your spouse's job offer health insurance?  If you're over 26, this is where you'll want to start.  Employer-sponsored plans are also called Group Health Plans, and your insurance policy will be rated and administered based on certain characteristics of your overall group.  Your company may help you pay your premium or provide other health-related benefits, so it's important to ask what your policy offers.  

Your company will likely have an Open Enrollment period. During this once-a-year period of time, you have the option of changing your healthcare plan.  You might also be able to change your plan at a time other than the Open Enrollment period if you have a qualifying life event, such as starting a new job, getting married, or having a kid.

3. Individual Policies ("Obamacare") 

Words like "Obamacare," "Healthcare.Gov," and "Affordable Care Act" have been floating around the news lately; you may have heard of them.  They refer to the individual marketplace intended to provide insurance for individuals and families who can't get insurance through work and don't qualify for Medicare or Medicaid.  People in these categories include the self-employed, those working part-time (or multiple part-time jobs), and people who work for small businesses that don't provide health insurance.   

The Affordable Care Act (ACA), which was passed in 2012, made it illegal to raise costs or deny coverage based on pre-existing conditions.  It also mandated that everyone in the United States buy health insurance.  In order to help people pay for this newly-required coverage, the ACA set up premium subsidies to help low to middle income families afford health insurance.  You can check here to see if you qualify for a subsidy.

An Individual Policy (a policy for you and/or your family) can be bought through a local Health Insurance Agent or on HealthCare.Gov (the "Obamacare website" people often refer to).        

4.  Faith-Based Medical Sharing Companies

Places like Medi-Share are a potential alternative to Individual Health Insurance Policies.  They are "Healthcare Sharing Ministries" based on the idea of sharing medical costs among people of the same faith.  While they can often be less expensive than insurance bought on the healthcare exchange, they require their members to sign rather stringent declarations of faith and conduct agreements and don't provide coverage for certain claims that are the result of actions in conflict with the conduct agreement.  It is important to understand that this is not insurance and is not subject to the same rules and regulations as insurance companies, so be sure to do your research before signing up for the lower premium.  

5.  Medicaid

Medicaid provides free or low cost care to individuals and families who qualify based on family income and size and is the single largest source of healthcare coverage in the U.S.  You can visit Medicaid.Gov to learn more about eligibility guidelines.

6. Medicare

Medicare provides health insurance coverage for those over 65 and to some younger people who meet these eligibility standards.

Ever look at your pay stub and wonder where all that money you're paying in taxes goes?  1.45% of your earnings goes toward Medicare taxes.  Your employer kicks in another 1.45%, meaning a total of 2.9% of every dollar you earn goes toward Medicare.  

The Bottom Line

You need health insurance.  This is important, but it's also intidimating and can be expensive.  Don't be afraid to ask for help.  I guarantee you are not alone in finding your healthcare options confusing. Reach out to your HR department, a licensed Health Insurance Agent, or someone else who you trust to learn more.  Health insurance and medical costs are expensive.  It's worth the time to learn about all your options so you can make the best decision for your healthcare needs.

 

Stephanie Vail

About the Author 

Stephanie (Custer) Vail is a member of the LPL Custer Financial Advisors team.  She lives in Grand Rapids, Michigan and specializes in helping millennials with financial literacy and financial planning.  To learn more about Stephanie and Custer Financial Advisors, visit www.CusterFinancialAdvisors.Com or email Stephanie at SVail@lpl.com.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. For advice specific to your situation, please contact us.