How to Choose Health Insurance as a Young Professional

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health insuranceOne of the rites of passage for those emerging into adulthood is choosing health insurance. Making this decision isn’t always easy, but it’s important.

If you go long periods without health care coverage, you might not be able to get on the plan that you want in the future. While some aspects of the recent health care reform law have changed the way coverage is provided, you are still better off with continuous coverage when possible.

Health Care if You are Under 26

The health care reform law has some special considerations for those who are under 26. If your parents have a plan that allows dependents, and if you are unmarried, under 26, and without access to employer-sponsored health insurance, you can stay on your parents’ insurance plan.

This can be a smart move for those who can’t get their own health insurance, but still want to be covered. Check to determine your eligibility, and then stay on your parents’ plan as long as is practical.

Consider High-Deductible Plans

There are a number of health plans out there that come with high deductibles and limited coverage. There are medical accident plans designed for those who coverage in the event of a major medical event, but who don’t need regular health supervision. These are usually fairly cheap, and they can meet the needs of the young professional.

Additionally, it is worth considering high-deductible health plans. These are plans that require you to pay more out of pocket, but you have much more affordable premiums. You can use a high-deductible plan in conjunction with a Health Savings Account. These plans are great for individuals and families that don’t have a lot of recurring health care needs.

Reduce Your Health Care Costs and Choose the Right Health Plan

As you prepare to get into the nitty-gritty of health plans, Reid Rasmussen has some tips. Rasmussen has been in the health insurance industry for more than 20 years, and works with freshbenies, a medical discount card. (It’s important to understand the difference between a medical discount card/plan and health insurance.)

Rasmussen suggests the following tips for saving money on health care coverage:

  1. Stay healthy: “Obese women rack up an extra $3,613 a year in medical spending,” Rasmussen points out. If you work to stay healthy — no matter your age or gender — you will be sick a lot less, and have a lower risk for chronic (and expensive) health conditions.
  2. Use a broker: “Every state has different plan options, and a broker can help navigate them at no cost to the insured,” Rasmussen says. A good broker knows what’s available, and can help you find the best price.
  3. Know your needs: “It’s important to know how much you engage the healthcare system,” Rasmussen insists. He points out that the increase in high-deductible plans makes this knowledge more important than ever. “Most people don’t know how much they spend because ‘insurance pays for it,'” he continues. “Insurance isn’t paying for it, but most people haven’t made that mental shift yet.” Know your needs, and you’ll have a better idea of how to get the right coverage at the right price.
  4. Don’t over-insure: It’s surprising to think that more isn’t always better, but that is the case. “Knowing real-life numbers helps you choose  with facts versus feelings,” Rasmussen says.

Finally, Rasmussen suggests that you consider new tools, from medical discount cards, to web sites that can help you keep tabs on health care costs. With the right planning, you can start your career with the right health insurance coverage.

(Photo: a.drian)

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3 Responses to “How to Choose Health Insurance as a Young Professional”

  1. admiral58 says:

    I would use a High Deductible plan and put in as much as I could into an HSA Account.

    • cackalacky says:

      For a lot of people, the HSA isn’t work the hassle. Instead, put your money into an interest-bearing savings account, then claim your medical expenses as an above-the-line deduction on your tax return.

  2. cackalacky says:

    A lot of young people thinking about purchasing health insurance for the first time don’t understand the fundamental concepts. For instance, that people with health insurance pay a reduced “negotiated” rate for their in-network health care (co-insurance). It’s pretty basic to how health insurance works, but for 27-year-olds it may be a brand new concept. I spent years tearing out my hair over my step-daughter’s ignorance of the importance of choosing “preferred providers” over “out-of-network” doctors when she was away at college. On some occasions, she would even go to providers and flat-out not even give them her insurance information. There you go, maybe a topic for your next blog post!

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