A Millennial’s Guide to Buying Health Insurance

How to do your taxes, how to start & manage your retirement plan, and how to select a health insurance plan. These are just a few things they don’t teach you in college — but they should.

As a young adult, you already have a lot of new responsibilities like getting a job, paying your bills, renting an apartment and the list goes on and on. So if you’re young and healthy, why should you invest in a health insurance plan? You probably rarely see a doctor anyways…

The truth is that getting a health insurance plan could actually save you money in the long run. Health insurance offers you financial and literal protection should something unexpected happen to you. Without it, you could be forced to pay thousands of dollars if an unanticipated health emergency occurs.

Don’t worry, we’re here to help you choose a plan that best fits your needs and your budget.


Step 1: Know Where You’ll Get Covered

First, determine how you’ll be getting a health insurance  plan.

  1. Your Parents: As long as you’re under 25, you’re eligible to stay on your parent’s plan.
  2. Your School: If you’re 18-25, you can try to get insured through your school.
  3. Your Employer: Most employers offer health coverage and often subsidize part or all of the cost. Thus, it’s usually the most affordable option if available to you.
  4. A Broker or Private Exchange: If you’re not eligible for subsidies, you can purchase insurance directly through a health insurance company or a licensed insurance agent such as Kaiser or us.
  5. Marketplace: If you’re not making much money, you may qualify for a premium subsidy through Healthcare.gov or your state’s marketplace. Look here first before going direct.

Step 2: Determine What You Will Need or Want Covered

Next, take a look at your past health insurance usage and analyze what you might need or want covered for this year. For example, how many times did you go to the doctors or an emergency room? How often did you fill a prescription? Did cost ever prevent you from doing any of those things?

Next, anticipate what you might need or want health insurance for this year. For example, are you planning to have a special surgery or go through physical therapy? Or are you planning to start a family and want certain services covered? Write these answers down and then look for a few plan options that satisfy what you want covered.

Step 3: Outline Your Budget

Calculate what you can pay and what you are willing to pay for your desired health insurance plan. Pro Tip: Don’t judge a plan by its premium. Just because a plan has a lower premium cost does not mean that it covers the benefits you are looking for.

No matter what, don’t go without a plan.

Step 4: Know the Terminology.

Health insurance is confusing. That’s why it’s important to understand the language so you can read the plans and truly understand what benefits you’re getting.

  • Premium – This is the cost of the insurance policy itself. It’s typically billed monthly by your insurance provider or taken out of your bi-weekly/monthly paychecks if you are covered by an employer.
  • Deductible – This is the amount you pay for covered in-network services each year before the plan pays for specified services. Some plans have a separate in-network and out-of-network deductible. If you choose a plan with an individual deductible of $5,000 for example, that means that you’ll have to pay $5,000 in in-network medical expenses before your plan provider starts paying for a portion of the services.
  • Coinsurance/Copayment – This is the amount you pay to a healthcare provider at the time you receive services. You may have to pay a copay for each covered visit to your doctor, depending on your plan, though not all plans have a copay.
  • Out of Pocket Limit/Max – This is the annual limit on your costs. After you meet the maximum out-of-pocket amount, your plan pays for 100% of covered services. You may still pay copayments, and you will still have to pay for non-covered services. Refer to the plan’s Benefits Summary for more details.

See more health insurance terms here.

Step 5: Compare Plan Types.

There are a variety of options to choose from, and the most common plan options are HMO’s, PPO’s, and HSA’s.

  • HMO – Health Maintenance Organization: With an HMO plan, you have to stay in your provider network to see a doctor and you need to get a referral from your primary doctor to see a specialist.
  • PPO – Preferred Provider Organization: With a PPO plan, you have more flexibility to go out of network or see different doctors or a specialist, but it often comes at a higher monthly premium.
  • HSA –  Health Savings Account: When you purchase a qualified high deductible health plan, you can often qualify for a health savings account. An HSA is a tax-advantaged medical savings account available to taxpayers. The funds contributed to an account are not subject to federal income tax at the time of deposit. Thus, it’s a great option for individuals who want a lower cost health insurance plan but still want to put away funds for health related emergencies.
  • Catastrophic Plans – These plans are built specifically for healthy individuals often under the age of 30. They are often cheaper and will cover your basics such as an annual check up. However, if you have specific prescriptions or need special coverage, these plans are not recommended.

Should I Choose an HMO or PPO?

When choosing between an HMO and a PPO plan, we suggest looking back at your past medical history to see how often you’ve actually needed a specialist or whether you may require a specialist in the future. If the answer is yes, you may want to consider a PPO plan so you have that flexibility.

Also, if you have a preference for which doctor you see, check to make sure your preferred doctor is covered in your plan’s network. With a PPO plan, you will have more flexibility to choose your doctors, but with an HMO plan, you have to select from the available primary care physicians in your network.

Bottom line, if you have a doctor or specialist you love and want to stay with them, select a plan that allows you to do so.

Step 6: Check Your Provider Network.

A provider network is a list of doctors, health care providers, and hospitals that are contracted to a specific health insurance plan. If you have a preferred doctor, you’ll want to make sure that they are contracted in your provider network and covered by your health insurance policy to ensure you stay in-network and keep costs down.

Like convenience? You’ll also want to check for nearby hospitals and health care organizations in your area to make sure they are covered under the policy you’re reviewing. We suggest eliminating any policies that don’t have local in-network doctors and those with few provider options.

Step 7: Select a Plan.

Once you’ve selected a plan, make sure to cancel your other health plan if there will be overlap in coverage to prevent paying multiple premiums.

Have questions about how to select a health insurance plan for your or your family? Give us a call at (619) 222-0119.

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