Getting the Most out of Life

Will Switching Health Care Plans Affect Your Finances?

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Thanks to 2010’s Affordable Care Act, young adults are legally permitted to remain covered on their parents’ insurance until age 26. But with so many health care plans available to you, and because obtaining health coverage is now mandated by law for every American citizen, making a decision is a fundamental requirement for entering adulthood.

When you start your first job out of college, you will likely have the option to enroll in your company’s health care plan. But if you haven’t turned 26 yet, you could also stay on your parents’ plan. Should you? Or should you take the benefits your employer offers?

Here are some things to consider:

The Cost

The first thing to examine is how much you’ll pay for care. Each time you make an insurance claim, you must meet a deductible. Let’s say you got injured and your hospital bill totaled $3,000. If your insurance deductible is $500, then you would have to pay that price before the insurance company would cover the remaining $2,500.

On your own insurance plan, meeting the deductible falls completely to you. However, if your family has already met the annual deductible on a plan that covers everyone, you would have no out-of-pocket costs. Your medical history is an excellent barometer for determining which direction is best for you. If you are relatively healthy, then selecting the plan that will cost you less makes the most sense.

The Location

When considering health care plans, think about the cost of visiting an out-of-network provider, especially if you live far from home. Your local providers may be considered out of network for your parents’ plan, which would make it much more expensive to see them. The savings received from staying on your parents’ plan may not even cover the cost of living outside of the typical network of health providers.

The Privacy

There are times when you need to visit the doctor and don’t want the details shared with your parents. This may be worth the cost of paying for your own health care plan. When it is time to make a health claim, the primary policy holder has access to all the claims made on the plan. If you stay on your family’s health plan, understand that you are waiving your right to confidentiality.

The decision to purchase your own health care plan is one that must not be taken lightly. Fortunately, there are numerous options available to you. You could remain on your parents’ plan, choose a plan through your employer, or just procure the minimum coverage required. Ultimately, you should review each type of health care coverage and make a decision based on your personal and financial needs.

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LaTisha Styles is a motivational speaker, millennial money expert, and spokesperson specializing in simple finance for millennials. LaTisha is the producer and host of Young Finances TV, a weekly series featuring funny, insightful videos on the basics of personal finance. LaTisha has been quoted in Forbes and Mainstreet, featured in The Economist, and mentioned in US News as a top personal finance expert to follow on Twitter. You can follow LaTisha on Twitter for daily millennial money tips to budget, invest and achieve success!