A staggering number was recently released showing that over 20 million people ages 18-34 are without healthcare. There are many reasons as to why there are some many in this age group without health insurance. The main reasons include working part-time and therefore not being offered coverage, not being offered coverage regardless and not being able to afford coverage on your own, and pre-existing conditions.
With the passage of the Affordable Care Act a few years ago, individuals up to the age of 26 can be covered under their parent’s healthcare policy. There is a caveat to this however: until 2014, grandfathered plans don’t have to offer the coverage. But what if you aren’t able to be covered under your parent’s policy for some reason? What then?
Buy Your Own Coverage
With the passage of the Affordable Care Act, individuals will not be able to buy insurance coverage on their own. The law claims that the cost for purchasing this coverage will not be prohibitive. Recent studies have shown that for a 27 year old male, the most basic insurance plan would cost him roughly $150 per month. Note that his is just for the premium. That plan would come with a deductible of roughly $4,000. (These numbers are just estimates as true numbers will not come out until 2014.)
What this is saying is that is this is you, you would pay $150 per month or $1,800 for insurance coverage. Should you need to receive healthcare services, you would have to pay the first $4,000. Everything above $4,000 would be covered by the insurance company. There might be some services that are covered under the policy, this is just a hypothetical.
What if You Forego Coverage?
If you choose not to have coverage, you have to pay a penalty. The minimum penalty will start in 2014 at $95 per person and increase to $695 per person in 2016. After that, the penalty will increase with the rate of inflation. At first glance, $695 may seem like a lot, but it is much less than actually paying for coverage.
Should You Forego Coverage?
It might be tempting to save close to $1,100 per year by not having health insurance. But remember that you are just one accident away from entering into mountains of debt. Saving $1,100 sounds good, but it won’t be good when you have a $10,000 medical bill to pay. While you can argue that you are young and healthy, you cannot argue the fact that you donít know what is going to happen. Here are some random average costs to consider:
Daily Stay in Hospital: $4,000
Let’s say you have pain in your shoulder. You visit you doctor who orders an x-ray. They find nothing but order an MRI jus to be safe. The MRI shows you have some inflammation and need some basic prescription drug. Your out of pocket cost without insurance: $1,725 (I used the figures above the x-ray and MRI and assumed the doctor visit was $100 and the prescription was $25.)
The idea here is just to show you how much healthcare services cost. At the end of the day, you have to decide if you want to take the risk by not having coverage or not. Personally, I would recommend it. But it is up for you to decide.
Disclaimer: All of the projected numbers here are based on estimates. They will vary based on age and where you live. You can expect to have a higher premium if you live in New York City versus Alabama.
Featured image provided by Rosmary via Flickr CC.