What Millennials Need to Know About Health Insurance

August 9, 2018

Originally published the The Balance

If you're a "Millennial," born sometime in the 1980s, you're probably as healthy as you'll ever be, and you're definitely young. Does this mean you can forego health insurance? Decidedly not. Even healthy people develop ailments, catch diseases and get into accidents. The upside is, as a young and healthy person you'll find the cost of buying insurance more affordable than it is for older Americans.

If you're a Millennial, you already handle your health care differently than other Americans. Millennials are cost-conscious, and more likely to ask about the cost of treatments and coverage before getting them. They are less likely to turn to a primary physician for non-emergency care, instead opting for retail clinics, urgent care centers or emergency rooms.

And, they’re more likely to ignore their medical problems. According to research from the Transamerica Center for Health Studies (TCHS), nearly half of Millennials have minimized healthcare costs by skipping, delaying or stopping care early.

Because this generation consumes medical care differently, its members also need to think long and hard about how they choose their health insurance.

Get a Sense for Your Typical Usage

Start by taking a look back at the prior year to get a sense of your typical medical needs: How many times did you go to the doctor, a clinic or an emergency room? How many times did you want to go, but didn’t because of cost concerns? How much did you spend on prescription drugs, and are there any you take on an ongoing basis?

Also consider what you might need in the next year. Perhaps you’re thinking about starting a family, or getting physical therapy for your hamstrings.

Once you’ve finished that self-assessment, here’s what you need to do.

Know the Terminology

“The big thing for Millennials—especially for first time shoppers easing out of their parent’s coverage—is really understanding the key concepts that take up costs,” says Jennifer Fitzgerald, CEO and co-founder of PolicyGenius, an independent online insurance marketplace. “Healthcare is complicated… the premium you pay isn’t the whole story.”

You need to understand the basic differences between high deductible plans (perhaps with HSAs) and PPOs. Factor in co-pays, the flat fees you pay for services before the insurance kicks in, and co-insurance, the percentage you pay after you meet your deductible. Out-of-pocket maximums matter, too.

Set Your Budget and Comparison-Shop

As with any new expenditure, calculate how much you can pay each month, and then ask yourself how much you’re willing to pay. Health insurance costs have been highly volatile in recent years. You can get an idea what it will cost you to get coverage now by comparing offerings at the national healthcare exchange, Healthcare.gov, or at a private online exchange such as eHealth. (Your state may have its own healthcare exchange, but you can start with Healthcare.gov in any case.)

Given your age, and assuming you're fit, going for a high deductible plan will help you keep your premium costs down. "If you’re in good health now and don’t have any future procedures planned, then go for a higher deductible,” says Fitzgerald. “If not, then go for the lower deductible.”

If you're under age 26, current law allows you to stay on your parents' policy. But that doesn't mean it's the best option available to you. Do your due diligence to find the best price by comparison shopping all of the options available to you, Hector De La Torre, executive director for TCHS, recommends.

When you turn 26, you have 60 days to get your own insurance coverage if you’re still on your parent’s plan. Generally, if your employer offers one, that will be the most cost-effective plan. But these days, some employers are passing off so much of the cost to employees that you might do better on your spouse’s plan or by shopping independently.

If you don’t have employer-based coverage, or you may be eligible for a subsidy, the Healthcare.gov exchange or eHealth.com can serve for comparison shopping.

Look for Convenience

Millennials favor immediacy and convenience, says Robin Gelburd, president of FAIR Health, a not-for-profit organization seeking transparency in healthcare costs. They are more likely to be self-employed or freelance workers, and less likely to have a regular primary care physician. As noted, then tend to use retail clinics, urgent care centers and emergency rooms.

If this is your preference, look for a plan that cover those costs. You also can check for plans that offer a form of tele-medicine or electronic communication for minor ailments. Industry leaders include Teladoc, Doctor on Demand and American Well.

Factor in Prescriptions

Don't forget prescription coverage, especially if you use an expensive medication regularly. You can save a significant chunk of change if your prescriptions are covered by your plan.

Nate Purpura of eHealth notes that about two-thirds of individual market health insurance plans don’t cover prescriptions drugs until after you hit your deductible. If you’re spending more than $50 a month on prescriptions, it’s worth looking into plans with lower deductibles.

Whatever You Do, Don’t Go Without

At this writing, the federal fine for going without health insurance is expected to disappear in 2019. But that fine was by no means the only risk to going without insurance. At best, you'll be gambling that your general health will stay good. You're also likely to ignore minor health problems in hopes that they'll go away. It's all too likely they'll get worse, and much more expensive to treat.

Read the full story at The Balance