Our current health care system can be complicated and confusing. If you are a Millennial, if one of your kids is a Millennial or you know a Millennial we have answers to questions you may have regarding the best way to maneuver the heath care system.
HOW LONG AM I COVERED UNDER MY PARENTS’ HEALTH INSURANCE POLICIES?
According to provisions of the Patient Protection and Affordable Care Act of 2010, whether you live at home or are away at college, you’re eligible to be covered under your parents’ health plan until you’re 26 years old. Ask your parents to check the policy for the details. Many students take advantage of health insurance plans offered by their colleges because such plans are relatively inexpensive and the services are close at hand. Whether you’re covered by your parents or your school, you’re likely to be on your own after you graduate. If you’re working, check any health insurance options your employer offers. If you’re not working or your employer offers no health benefits, consider purchasing short-term health insurance (if available) or catastrophic coverage, or look into your options under COBRA if you recently left a job.
I’M CURRENTLY ON MY PARENT’S HEALTH PLAN. WHAT DO I DO WHEN I TURN 26?
Under the Affordable Care Act, young adults up to age 26 are eligible for dependent coverage under a parent’s health plan. Once you reach the age of 26, you are no longer eligible for dependent coverage unless the health plan offering dependent coverage or your state of residence specifically extends that coverage to dependents beyond age 26.
If you lose coverage under your parent’s plan, you may qualify for special enrollment through your employer’s plan or your spouse’s health plan in another employer plan for which you are eligible (including health coverage through your job or your spouse’s job). You generally must enroll within 30 days from the date you are no longer covered as a dependent.
If you’re covered by your parent’s Health Insurance Marketplace plan, you may qualify for individual coverage through the Marketplace during a special enrollment period. This special enrollment period extends up to 60 days before and 60 days after your birthday. If you apply for coverage through the Health Insurance Marketplace, you may qualify for premium tax credits and other savings based on your own income.
You may also have other options including student health insurance if you’re attending school. And remember, you always have the option to find your own health insurance plan before age 26. Keep in mind that you are required to have minimum essential health coverage. If you don’t, you must pay a fee for any month that you didn’t have health insurance when you file your federal income tax return, unless you qualify for an exemption.
I’M LOOKING FOR A JOB. HOW CAN I TELL IF AN EMPLOYER IS OFFERING A GOOD INSURANCE BENEFIT PACKAGE?
Ultimately, an employer is offering a good insurance benefit package if it’s one that appeals to you and meets your needs. But here are some specific things you might look for.
Perhaps the most important piece is the health insurance offered. You’ll want coverage that adequately meets your medical needs. Hopefully, it will also allow you to continue seeing your current doctors and health-care providers. A complete package would offer dental, vision, and prescription drug coverage as well. And don’t forget to find out how much you’ll pay for health insurance–ideally, the employer will pay all or most of the premium cost for a single person.
Most large employers offer some group life insurance coverage. A basic package would provide term insurance coverage on your life in an amount at least equal to your annual salary. A more generous package would provide coverage for your spouse, domestic partner, or children, and would allow you to purchase low-cost supplemental life insurance.
If you get sick or injured and can’t work, disability insurance replaces a portion of your income. Many employers offer short-term disability insurance that covers you for up to two years, but a good benefit package will also include long-term disability coverage. Again, the best package is one for which the employer pays all or most of the insurance premium.
Finally, a good benefit package might also offer you the chance to buy other types of coverage (e.g., long-term care or auto insurance) at group rates.
WHICH IS BETTER: AN HMO OR A PPO?
The question really is, which type is better for you? If you’re able to choose between a health maintenance organization (HMO) and a preferred provider organization (PPO), you’ll need to evaluate the coverage that each offers and determine which one best suits your needs. Although both HMOs and PPOs are types of managed care systems, each manages health care differently.
HMO members have to pick a primary care physician (PCP), who provides general medical care and referrals to specialists. Both the PCP and any specialists you see must belong to the HMO network. The PCP must approve your request to see a specialist. PPO members aren’t required to choose a PCP and can see a specialist without a referral.
Out-of-network care (except for emergency care in some situations) is generally not covered by an HMO. A PPO won’t require you to receive care within the network, but you’ll save money if you do. For instance, the PPO may reimburse 90 percent of your health-care bill if you saw a doctor within the network, but only 70 percent of your bill if you saw a doctor outside the network.
HMO members usually pay a small co-payment for care (e.g., $10), but aren’t required to meet an annual deductible. If you belong to a PPO, you may have to meet a deductible (especially for hospitalization) and pay a larger co-payment (e.g., $20) than an HMO member when you receive care.
So what it boils down to is flexibility versus cost. If you routinely need to see specialists, travel a lot, or are willing to pay more to see whatever health-care provider you choose, then a PPO might be the right choice. But if saving money on health care is your main concern and you’re not worried about access to specialists of your choice, consider joining an HMO.
I’M PLANNING ON LIVING IN EUROPE FOR SEVERAL MONTHS. DO I NEED SPECIAL HEALTH INSURANCE?
Unless you’re in the military or working for an American company abroad that has a health plan in place, you’ll need to make sure that your health insurance will cover your needs–and don’t wait until you’re already sick or injured to do it.
If you’re planning to travel overseas, be aware that your health insurance plan may not cover you at all. Most managed care plans, such as health maintenance organizations (HMOs) or preferred provider organizations (PPOs), will cover emergency treatment. But HMOs may pay nothing if you see an out-of-network health-care provider for routine care, while PPOs will pay only part of the cost. So before you set foot on foreign soil, check the limitations of your policy and call your insurer’s customer service department if you have any questions.
If you’re going to be away for less than six months, a short-term supplemental health insurance policy may be sufficient for your needs. These policies are available from insurance companies or travel agents, and they offer accident and sickness coverage. However, read the policy carefully because the coverage is often limited.
If you’ll be out of the United States for more than six months, you may want to purchase expatriate health insurance. Underwritten by large insurers such as Lloyd’s of London, these policies offer standard emergency and routine care coverage, and can be customized to meet your specific needs. Be sure to check for pre-existing condition limitations, including pregnancy. Options available include maternity coverage, acupuncture, chiropractic services, language translation and foreign currency exchanges, and even emergency evacuation coverage. The application process for expatriate health insurance can be detailed and extensive; you’ll have to list any health problems you’ve had in the past 10 years. The cost of a plan will depend on several factors, such as your age, state of health, sex, and travel itinerary.
WHAT IF I HAVE OTHER QUESTIONS?
The health care industry is complicated for anyone at any age. At Kuderer Financial we have over 25 years of experience working with health care. Contact us to get your individual questions answered.
Prepared by Broadridge Investor Communication Solutions, Inc.