Health Insurance Options for Young Adults

The benefits young Americans stand to gain — and have already gained — from the Affordable Care Act provide security around their well-being.

Dependent Coverage

If their parents have an insurance plan that covers children, young adults can be kept on or added to the plan until they are 26. They are eligible to remain on their parents’ plans even if they are financially independent from their parents, married, no longer living with their parents, in school, or eligible for insurance through their employer.

The New Health Insurance Marketplace

The Health Insurance Marketplace (Exchange) is a new way to compare and purchase health insurance plans. The Marketplace provides consumers with choices of insurers and plans that are affordable in a way that makes it easy to understand and compare them.

Financial assistance is available to help students pay for health insurance if they enroll in a plan through the Marketplace and have an income that falls between 138 and 400 percent of the federal poverty level. For students who qualify for financial assistance, the government will pay a portion of their health insurance premiums directly to their insurance company every month.

These tax credits will be given up front — meaning students will get help paying for their premiums immediately, rather than having to wait until they file taxes in April — and students can apply for the tax credits even if they have never filed taxes before.

Fewer than half of young adults report knowing of the availability of financial help/subsidies and 72 percent feel under-informed about the new health law. Less than 3 in 10 know that plans now cover free preventative services but 71 percent say they want this care within the next year.6

How the ACA is helping young Adults:
→ Since 2010, an estimated 5.7 million young adults ages 19-25 have gained coverage.7

→ 2.3 million young adults gained health insurance between 2010 and October 2013 by staying on a parent’s plan.8

Student Health Plans

Some four- and two-year institutions partner with insurance companies to offer their students insurance plans. Under the Affordable Care Act, student health insurance plans will be required to meet basic standards of covering care. Even if their school offers an insurance plan, students will still be able to buy a plan through the Marketplace and may want to compare the plan their school offers to the options available through the Marketplace.

Catastrophic Plans

People under 30 and some people with limited incomes may buy what is called a “catastrophic” health plan, which will protect them from very high medical costs. A catastrophic plan generally requires the consumer to pay all of his or her medical costs up to a certain amount, usually several thousand dollars. The insurance company generally pays costs over that for essential health benefits. These policies usually have lower premiums than a comprehensive plan but cover the consumer only if he or she needs a lot of care.

Medicaid

Starting in January 2014, many states have adopted Medicaid expansion under the ACA to cover low-income, childless young Americans. Students who are at or below 138 percent of the Federal Poverty Level and live in a state that has expanded Medicaid eligibility are able to enroll in Medicaid. The map below depicts where each state stands on Medicaid Expansion as of May 2015, but states can decide to expand Medicaid at any time, and many states continue to debate expansion.

Figure 1: Medicaid Expansion

current-status-of-the-medicaid-expansion-decisions-healthreform

 

 


Footnotes

6 PerryUndem Research/Communication. (March 2010). Reaching Youth: Raising Awareness & Encouraging Use of ACA Preventive Care Benefit. Retrieved from http://www.advocatesforyouth.org/documents/ACAReport.pdf 

7 Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. (May 2015). Health Insurance Coverage and the Affordable Care Act. Retrieved from http://aspe.hhs.gov/health/reports/2015/uninsured_change/ib_uninsured_change.pdf

8 Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. (May 2015). Health Insurance Coverage and the Affordable Care Act. Retrieved from http://aspe.hhs.gov/health/reports/2015/uninsured_change/ib_uninsured_change.pdf

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