Current federal law enables you to remain on a parent’s policy up to age 26, and some state laws allow you to keep the coverage even longer.
When it’s time to get your own coverage, it’s important to know how to get a policy and understand the type of plan that will best fit your needs. Some plans offer more affordable premiums, while others pay more health care costs. But what’s most important is that you continue health insurance coverage, even if you’re young and healthy.
- Unmarried and married children can stay on their parent’s insurance until they turn 26.
- Some states extend the deadline indefinitely for disabled dependents.
- Once you’re off your parent’s insurance, you have several options for health care coverage.
When You Will Lose Health Insurance Through Your Parents
Currently, the Affordable Care Act (ACA) mandates that children are covered by a parent’s health insurance plan until the child turns 26, if the parent’s health plan offers coverage for dependents. The rule applies to unmarried and married children and all types of health plans, including employer-sponsored coverage, according to the Department of Labor.
The law also allows you to remain on a parent’s plan if you:
- Go to college or drop out of school
- Adopt or have a child
- Move out of your parents’ house
- Are not claimed as a dependent on your parents’ tax returns
- Refuse an offer of employer-sponsored health insurance
If your parents have coverage from the health insurance marketplace, you can remain on the policy until December 31 of the year you turn 26, or the oldest age allowed by your state’s insurance code.
Some States Extend the Age Limit
Some states follow the ACA’s age-26 rule, but others have laws that allow you to remain on a parent’s health insurance policy longer—but only under certain conditions. Although the following states offer exceptions, health care laws are subject to repeal or revision.
|Dependent Age Limit Exceptions|
|Florida||Up to age 30 for unmarried dependents with no children and who live with their parents up to age 30|
|Georgia||No age limit for disabled dependents incapable of self-sustaining employment|
|Idaho||No age limit for disabled dependents|
|Illinois||Up to age 30 for dependents who are veterans|
|Indiana||No age limit for disabled dependents incapable of self-sustaining employment|
|Iowa||No age limit for disabled dependents and full-time students|
|Massachusetts||No age limit for disabled dependents incapable of self-sustaining employment|
|Minnesota||No age limit for disabled dependents|
|Missouri||No age limit for disabled dependents incapable of self-sustaining employment|
|Nevada||No age limit for disabled dependents incapable of self-sustaining employment|
|New Jersey||Through age 31 for unmarried dependents who have no dependents|
|New York||Through age 29 for unmarried dependents who are residents of New York
No age limit for unmarried, disabled dependents incapable of self-sustaining employment
|Ohio||No age limit for disabled dependents incapable of self-sustaining employment|
|Oregon||No age limit for disabled children and elderly parents|
|Pennsylvania||Up to age 30 for those without dependents and are residents of Pennsylvania, or full-time students without dependents
Up to the length of deployment for full-time students who are National Guard or reservists who leave school due to deployment
|Rhode Island||No age limit for disabled dependents|
|South Carolina||No age limit for disabled dependents incapable of self-sustaining employment|
|South Dakota||Through age 29 for full-time students
No age limit for disabled dependents incapable of self-support
|Wisconsin||No age limit for full-time students
No age limit for full-time students who are National Guard or reservists called into active duty
No age limit for dependents called for federal active duty
Health Insurance Options for Young People
If you have aged out and need to find new health insurance, you have a few options.
Employer-Sponsored Health Insurance
Some employers offer group health insurance plans for their employees. With a group plan, the employer chooses the plan and often pays a portion of your premium. Some group plans may limit the doctors and hospitals from which you can seek services, and you may not be able to keep the same coverage when you go to work for another employer.
In 2020, employer-sponsored coverage cost an average of $7,470 for single coverage and $21,342 for family coverage. Typically, workers pay an average of 17% of the cost for single coverage and 27% for family coverage, according to the Kaiser Family Foundation.
The Health Insurance Marketplace
The marketplace provides health insurance tailored for people who don’t get health insurance through an employer. Many marketplace participants receive subsidies that lower their premiums. You can research and buy marketplace coverage at HealthCare.gov or through your state’s marketplace. Marketplaces allow you to apply during “open enrollment” periods that typically run from Nov. 1 to Dec. 15.
Some insurance companies offer short-term health insurance plans that provide basic health coverage but do not comply with ACA rules. These relatively affordable plans can be a stop-gap if you aren’t eligible for marketplace plans. Beware: Short-term plans can deny coverage for preexisting conditions.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers who have employer-based health insurance to continue their benefits. COBRA coverage is only available following certain qualifying events such as job loss, reduction in work hours, death of the policyholder, or divorce from the policyholder. The ACA also dictates that COBRA coverage extends to dependent children, up to their 26th birthday. Although COBRA can help bridge the gap if you lose your coverage, it often requires you to pay the entire premium out of pocket.
Federal and state governments work together to provide Medicaid, which is health insurance available to low-income adults, elderly adults, people with disabilities, children, and pregnant women. States administer Medicaid according to federal guidelines. Eligibility for Medicaid is based on your modified adjusted gross income. To qualify, you must hold U.S. citizenship or have a qualifying non-citizen status such as permanent residency. Typically, you must be a resident in the state in which you apply for Medicaid.
School-Sponsored Health Insurance
Many colleges and universities offer health insurance policies to their students. Some school-based plans offer coverage for less than $2,000 per year, with copayments ranging from $30 for an office visit to $150 for an emergency room visit. Check with your school to find out what its plan covers.
How Do You Choose the Right Coverage?
Before shopping for your first health insurance policy, it’s important to know the types of plans available, the level of coverage you can expect, and associated costs.
Types of Plans
The most common types of health insurance plans include:
- Exclusive provider organizations (EPO): With an EPO, the plan will only cover costs if you seek the services of doctors, hospitals, and services within the defined network, except when you need emergency care.
- Health maintenance organizations (HMO): HMOs contract with doctors, sometimes within a specific service area, to provide care and preventivehealth services. This type of plan only covers the cost of services provided by in-network caregivers, except in emergencies.
- Point of service (POS): With a POS, you pay less for physician and hospital care when you seek services with a network. To receive specialist care, you must obtain a referral from your primary care physician.
- Preferred provider organization (PPO): PPOs offer reduced-cost services when you seek care from doctors and hospitals within a network. This plan doesn’t require you to obtain a referral for specialist care.
Health insurance coverage requires you to pay a monthly premium. But you’ll also have to pay other costs when you need care.
- Deductible: The deductible is the amount of money you must pay out of pocket before the policy starts covering costs.
- Copayments: Fixed payments for certain services (primary care visit, specialist visit, urgent care, etc.) you make before or after you meet your deductible, depending on the plan. For example, a plan may require you to pay a $20 copayment each time you visit your doctor.
- Out-of-pocket max: A health insurance plan may cap the amount of money you must pay for health care services each year. In 2021, marketplace plans cap out-of-pocket costs at $8,550 for single coverage and $17,100 for family coverage.
Do Young People Really Need Health Insurance?
If you’re healthy, you might not think you need health insurance until you’re older. But consider this: Treatment for a broken leg can cost up to $7,500, and a hospital stay can cost $10,000 per day, according to the U.S. Centers for Medicare and Medicaid Services. If you don’t have health insurance, you’ll have to shoulder the entire cost of medical expenses if you sustain an injury or become ill.
Nearly 20% of households have delinquent medical debt and about 9% of households have at one time filed bankruptcy due to health care expenses, according to a 2019 survey conducted by the Kaiser Family Foundation and the Los Angeles Times.
Also, consider the potential for future health problems. Currently, federal law doesn’t allow ACA-compliant insurance plans to deny coverage for a preexisting condition such as diabetes or heart disease.