When shopping for health insurance, it’s crucial to compare premiums, out-of-pocket costs, provider networks, and plan types. Follow these steps to ensure you choose a health insurance plan that suits your needs:
| Company | Overall Forbes Advisor rating | Average monthly cost for single coverage for 21-year-old | Average monthly cost for single coverage for 27-year-old |
|---|---|---|---|
| Kaiser Permanente | 5.0 | $335 | $351 |
| Blue Cross Blue Shield | 4.5 | $419 | $431 |
| UnitedHealthcare | 4.0 | $355 | $372 |
| Cigna | 3.5 | $385 | $412 |
| Aetna | 3.5 | $371 | $389 |
1. Determine Health Plan Eligibility:
Identify the various options available for obtaining health insurance. Assess whether you can remain on your parents’ plan, access coverage through an employer, or opt for an Affordable Care Act (ACA) plan.
2. Decide on Benefit Design:
Different health insurance plans are associated with distinct benefit designs, such as Preferred Provider Organization (PPO), Health Maintenance Organization (HMO), Exclusive Provider Organization (EPO), and Point of Service (POS) plans. Consider factors like out-of-network care availability and the need for specialist referrals. Plans with more flexibility often incur higher costs, with PPOs being more expensive compared to HMOs and EPOs.
Determine the level of freedom you desire in your plan, and proceed to the cost comparison stage.
3. Weigh Premiums and Out-of-Pocket Costs:
Health insurance premiums constitute the cost of coverage, but it’s essential to factor in out-of-pocket expenses like deductibles and coinsurance when assessing overall costs. Compare premiums against out-of-pocket costs to make an informed decision. For example, a plan with a lower premium but a higher deductible may be suitable for those anticipating minimal healthcare needs, while a higher premium with a lower deductible might be preferable for others.
On the ACA marketplace, Bronze and Silver plans have lower premiums but higher deductibles and out-of-pocket costs, while Gold and Platinum plans have higher premiums and lower deductibles.
4. Check Provider Network:
Health insurance companies establish networks with healthcare providers, influencing where you can receive care and the associated costs. HMOs and EPOs typically require staying within the network, while PPOs and POS plans allow for out-of-network care at a higher cost.
Ensure the plan has an extensive provider network in your area, and confirm that your preferred healthcare provider is part of that network to avoid substantial out-of-network expenses.
By completing these steps, you can confidently select the health insurance plan that aligns with your specific needs and preferences.
Approach
Forbes Advisor employed a method to identify the top health insurance companies, specifically focusing on those most suitable for young adults. This selection was based on the average monthly costs of health insurance plans within the Affordable Care Act (ACA) marketplace for individuals aged 21 and 27.
The Forbes Advisor ratings were determined by considering the following factors:
- Average Affordable Care Marketplace rates (50% of the score): Calculated using the average costs within the Affordable Care Act marketplace for both 21-year-olds and 27-year-olds.
- Complaints reported to state insurance departments (25% of the score): Utilized 2021 complaint data sourced from the National Association of Insurance Commissioners.
- Plan ratings from the National Committee for Quality Assurance (25% of the score): The National Committee for Quality Assurance (NCQA), an independent nonprofit organization, accredits health plans and provides ratings based on specific metrics.
This comprehensive approach ensures a well-rounded evaluation of health insurance companies, emphasizing affordability, consumer feedback, and quality assurance metrics.
Average monthly costs for health insurance
| Who’s covered | Bronze plan | Silver plan | Gold plan |
|---|---|---|---|
| 21-year-old, individual coverage | $313 | $410 | $450 |
| 21-year-old, individual with one child | $549 | $720 | $791 |
| 21-year-old, couple coverage | $625 | $819 | $900 |
| 21-year-old, couple coverage with one child | $862 | $1,130 | $1,241 |
| 27-year-old , individual coverage | $330 | $433 | $476 |
Average monthly catastrophic health insurance costs
| Type of plans | Average monthly cost for single coverage for 21-year-old | Average monthly cost for single coverage for 27-year-old |
|---|---|---|
| Catastrophic health insurance | $235 | $247 |
| ACA Bronze plan | $313 | $330 |
| ACA Silver plan | $410 | $433 |
| ACA Gold plan | $450 | $476 |
Best Health Insurance for Young Adults FAQs
Is health insurance compulsory?
No, the majority of Americans are not obligated to have health insurance. Although the Affordable Care Act (ACA) initially mandated health insurance, the tax penalty associated with non-compliance was removed by Congress in 2019, effectively eliminating the requirement. Some states, such as California and New York, have their own individual mandates.
When is the open enrollment period?
For most states, the open enrollment period for the Affordable Care Act (ACA) is from Nov. 1 to Jan. 15. States with their own exchanges, like California and New York, may have slightly different open enrollment periods, generally around the same time of year. Employers, the primary source of health insurance for most individuals pre-retirement age, determine their own open enrollment periods, so specific details should be obtained from the respective companies.
Should I opt for my employer’s health insurance or stay on my parents’ plan?
The decision to stay on your parents’ health insurance or enroll in a company’s group health insurance plan depends on factors such as costs, provider network, and benefits. If the employer-sponsored plan is cost-effective or free, it may be a preferable option. However, it’s essential to scrutinize the plan’s out-of-pocket costs, including deductibles, coinsurance, and out-of-pocket maximums, as low or no-premium health insurance plans may have high out-of-pocket expenses when seeking care.
How can I reduce my health insurance expenses?
Opting for a high-deductible health plan (HDHP) like a Bronze or Silver plan in the ACA marketplace is one approach to lower health insurance premiums. However, such plans entail higher costs when accessing care. It’s crucial to assess potential savings from lower premiums against the possible increase in out-of-pocket expenses.
Do younger individuals pay more for health insurance?
No, generally, younger individuals pay less for health insurance on the ACA marketplace. For example, our analysis indicates that the average 21-year-old pays $313 monthly, and a 27-year-old pays $330 for a Bronze plan. These figures are considerably lower than the overall average cost for individual coverage on a Bronze plan ($928 a month). In contrast, employer-sponsored group health insurance plans do not base costs on age.