Aging Out of Parent’s Insurance: What Are Your Options?
Sorting through different health insurance plans might seem daunting, especially for those who have been on their parent’s plan their entire life. Since the Affordable Care Act (ACA), young adults can stay on their parents’ insurance plans until the age of 26. There are a few states, including New York, that even allow young adults to remain covered on their parents’ policy until the age of 30 or 31. In any case, what happens afterwards? This article will provide a few tips to help make the transition as smooth as possible.
Start Your Research Early
First, it is important to learn when you will actually lose your insurance coverage. If you are covered by a parent’s employer-based plan, your coverage will likely end during or shortly after the month of your 26th birthday. If you are on a parent’s health insurance marketplace plan, your coverage will likely end on December 31 of the year you turn 26. You should confirm the exact date with the plan or your parent’s employer.
There is a window of about four months for you to consider new health insurance plans.
If you are on an ACA plan, this window starts 60 days before your 26th birthday and ends 60 days after your birthday.
For individual plans not on the ACA marketplace, the shopping period starts 60 days before your 26th birthday and ends only 30 days after your birthday.
Factors to Consider as You Look for a New Plan
When you lose access to your parent’s plan, you need to start considering what plan might be best for you and your diabetes management.
Compare plan costs. Look for the health plan’s summary of benefits and coverage (SBC), which insurers are required to provide anyone shopping for a new plan. The SBC includes information on the plan’s coverage and cost (e.g., deductibles, out-of-pocket limit, co-pays, and co-insurance). For more information on decoding and understanding health insurance language, check out diaTribe’s guide here.
The SBC must also include a general coverage example for managing type 2 diabetes. This example provides a snapshot of how much the plan might pay for medical care for a sample patient with type 2 diabetes. The example will not estimate your personal diabetes-related costs directly but will help give you a sense of total costs as you compare different plans.
Note that a limitation of using an SBC to compare health plans is that it does not take into account the complexity of your diabetes management, which can significantly affect out-of-pocket expenses under a health plan. As you would expect, the example coverage costs for managing type 2 diabetes in an SBC is more accurate for simple management than complex management plans. It is important to discuss your specific diabetes management plan with your healthcare provider.
Research how well the diabetes devices and medications you use (and want to use) are covered. The formulary will tell you which devices and medications are covered, and at what tier. The SBC will let you know how much that tier would approximately cost you. For instance, in this example formulary, the Lantus SoloStar insulin pen is in tier 3. Based on this example SBC, this would be considered a “non-preferred brand,” meaning that you have to pay 40% of the drug’s cost. Insurance companies change the tiers of medications every year, so it is important to stay up-to-date on this information.
The specific benefits and what you pay within these categories of services can vary by state and by plan. When you are shopping for health insurance, it is important to figure out if the plan covers the diabetes supplies, services, and prescription drugs you need, and what it costs. To learn how to see if your current prescriptions are covered by different plans, check out our diaTribe article that describes formularies and SBCs in depth.
An Overview of Your Options
Here is an overview of options for you to consider with the factors discussed above in mind.
Choose a plan that your school or employer offers. You can find a deep dive into employer-based health insurance, employee health benefits, and employee rights for people with diabetes in our “Diabetes at Work” article.
Find a plan through the health insurance marketplace (also known as ACA exchanges) on your own. See our step-by-step guide for how to navigate healthcare.gov and browse through your options. Trained individuals called “Navigators” are available to help individuals understand their coverage options and the enrollment process. You can find in-person assistance by entering your city and state or zip-code. You can also contact a Navigator over the phone at 1-800-318-2596, 24 hours, 7 days a week. They are available to speak in multiple languages. If your income is between 100% and 400% of the federal poverty level (about $12,000 to $48,000 for an individual), you may qualify for tax credits to help subsidize the plan.
See if you qualify for Medicaid. Three dozen states expanded Medicaid eligibility. The expansion makes people with incomes below 138% of the federal poverty level eligible for a Medicaid plan. That's slightly more than $17,000 for an individual. Check out our article on what states cover CGM through Medicaid here.
Stay on your parent’s employer-based insurance through COBRA. COBRA allows you to stay on your parent’s insurance plan for up to an additional 18 months after your 26th birthday. In this case, the employer no longer pays the premiums, so this option is quite expensive.
Many insurance plans change their coverage benefits and premium costs each year as well as their preferred healthcare providers. Therefore, it is in your best interest to know how to navigate through the different insurance options. Living with diabetes makes understanding and accessing employee health benefits like insurance all the more critical.
By Divya Gopisetty