Do I Need Health Insurance If I’m Young and Healthy?

Most people are looking to save money in any way that they can. A younger workforce in the beginning of their careers are often met with lower starting salaries and right around this time is when they become ineligible for their parents’ insurance plan. The sticker shock can be overwhelming which is why many people ask, “If I’m young and healthy, do I need health insurance?”

So spoiler alert: yes! You do. So, we’re going to go over some real world examples and talk about some less expensive options that you can look into.

Costs Without Health Insurance

Let’s first talk about costs without insurance. You can use the healthcare bluebook site to compare costs. Their calculations have been published in peer-reviewed medical journals. So it is a really reliable resource and it’s free. If you create an account you can do your own research.

The truth is; it’s not really just about the numbers. Uninsured people are far less likely to seek medical care and not just in emergencies. They are less likely to seek preventative and diagnostic care which could catch something in the early stages and quite literally save your life. 

So, what are your options?

Employer Group Health Insurance

If your employer has at least 50 FTE, by law, they must offer you health insurance. Additionally they must pay at least 50% of your premium. If this option is available to you, this is your best, least expensive option. Please make sure to enroll when first eligible and of course renew your enrollment during eligibility. If this is not the case, there are still other options available to you.

HMO vs PPO

You will likely have the choice between an HMO and a PPO.

HMOs will usually have lower monthly premiums but less flexibility. You will need to have a PCP and a referral to see a specialist. This can mean additional doctor visits and more time off work. You also can only go in network.

PPOs will have higher monthly premiums but more flexibility. No PCPs or referrals required. You can go in and out of network, but out of network will be more expensive.

Marketplace Health Insurance

The next largest option is a plan through the marketplace. All marketplace plans must offer at least the 10 essential benefits but they may offer additional benefits as well.

You can choose from HMOs and EPOs (and sometimes PPOs) and will have the option to enroll in a Bronze, Silver, Gold or Platinum plan . These metal tiers indicate the cost sharing structure, not the plan’s quality.

You may also be eligible for a premium tax credit. A premium tax credit is just a tax credit paid upfront which is reflected in a discounted monthly premium. You may be eligible based on your income and household size.

Short Term Medical Plans

There are also short term medical plans. These have evolved in recent years. A young, healthy person can usually access a quality plan starting around $100 per month.

STMs offer nationwide PPO coverage and you are able to tailor your plan to meet your needs beyond just basic doctor visits and prescriptions.

There are some changes coming down the road for STM so they may not always be as accessible and even right now they are not available in all states. But if it is an option that would work for you, make sure to take advantage while you can.

You can enroll in a STM whenever you’d like and they are a great option for a young healthy person. STM require medical underwriting so a young, healthy person will have access to better rates than someone older with more health concerns. 

Catastrophic Coverage Plan

If you are young and healthy, you may be able to handle your basic preventative care out of pocket, but will likely want something in place for major medical needs. In that case, you could look into a catastrophic coverage plan. 

Catastrophic coverage plans are available on and off the marketplace. A marketplace catastrophic coverage plan is typically only available to those under 30 or those who are able to apply for a hardship exemption. They will be HDHP with low monthly premiums, but you will not be able to apply a premium tax credit if eligible.

A marketplace catastrophic coverage plan, will offer some minimum benefits prior to meeting your deductible such as allowing you to see your PCP up to three times per year. You will enjoy a much lower premium with an out of pocket maximum to protect you from major medical bills.