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What You Need To Know About Finding Health Insurance

I pride myself on being a financially savvy twenty-something — I have a budget, decent savings, a Roth IRA, and no debt. But when it came to one of the most important financial decisions I’ve had to make, I was clueless.

I’m talking about health insurance. If you’re lucky enough to be offered insurance at work, you can simply enroll in your company’s plan. But like many young adults, I don’t get insurance through my job — I’m a freelance writer. When I bought my own health insurance plan over a year ago, I didn’t know what I needed to buy or how much I had to pay. I just picked a plan that sounded good and hoped for the best.

Since healthcare reform passed earlier this year, there are more health insurance options for young adults and new sources for health insurance information. So there’s no excuse not to get covered.

Why you need insurance, even if you’re young and healthy

Young adults are less likely to be uninsured than any other age group because we’re less likely to work in jobs that offer health insurance, according to a 2009 Henry J. Kaiser Family Foundation report on the uninsured. We’re also likely to be in school or have low incomes, which can make finding affordable health insurance difficult.

Considering that medical bills are the leading cause of bankruptcies, according to a 2009 New England Journal of Medicine study, health insurance is one of our most important financial protections. Even if you’re healthy, an unexpected injury like a broken leg could leave you with thousands of dollars of debt if you don’t have insurance.

New options for young adults under 26

If you’re under 26 and don’t get health insurance at work, a recently enacted provision of healthcare reform lets you stay insured under a parent’s plan, even if you don’t live with your parents or you’re married. Latching onto a parent’s plan may be your most affordable option – your parent’s premium may increase slightly, but the increase will likely be less than you would pay for your own plan. For more details about the new dependent health insurance provision, visit GettingCovered.org.

Buying insurance on your own

When I bought my own health insurance plan from the individual market, I didn’t know what kind of insurance plan I needed, how much I should pay for insurance or how to compare plans. So I asked Keith Mendonsa, a consumer specialist at the health insurance comparison website eHealthInsurance, for some pointers on shopping for health insurance.

First, determine what you need health insurance for, Keith said. Do you use prescription drugs? Visit the doctor frequently? If you’re a woman, do you need health insurance to cover medical care for a pregnancy? Do you want to visit a particular doctor?

Understanding your health care needs will come in handy when you search for insurance plans. If you plan to get pregnant, you’ll want to look for a plan that covers maternity care (not all insurance plans do). Have your heart set on getting check-ups from your favorite doctor? You should pick a plan from an insurance network your doctor belongs to – otherwise, your visits may not be covered.

Comparing plans

To search for an insurance plan, you can use a website like eHealthInsurance or talk to an insurance broker. But comparing plans for price can be tricky — you’ll need to consider premiums, deductibles, co-pays, co-insurance and out-of-pocket maximums to figure out how much you’ll pay.

I told Keith I was unhappy that my insurer raised my monthly premiums by about 25 percent earlier this year. I found a similar plan with a lower premium and asked Keith if it would be a good option for me. Keith explained that the plan with a lower premium had a higher out-of-pocket maximum, so while I would initially spend less on premiums, I could end up paying more in the long run if I get sick.

Although it’s tempting to pick the plan with the lowest premium, ask yourself how much you could afford to pay if you actually got sick or injured – if it’s less than the plan’s out-of-pocket maximum, you may be better off with a plan with a higher monthly premium. But even if you choose a plan with a higher deductible or out-of-pocket maximum in exchange for a lower premium, you’re still making a better choice than skipping health insurance altogether to save $100 a month on premiums, Keith said.

Health care you can get for free

If you bought your own health insurance plan after September 23, 2010, changes under health care reform require your plan to cover preventive care, like flu shots and blood pressure screenings, for free — your co-pay, co-insurance or deductible wouldn’t apply. If you bought a plan before that date, it might be “grandfathered in” and not subject to this new requirement. For more information about what’s covered under the preventive care provision, check out Healthcare.gov.

Options for people with pre-existing conditions

You may not be able to buy your own health insurance plan if you have a pre-existing condition like asthma or diabetes. By 2014, health care will prohibit insurers from denying coverage due to medical history. But until then, you may be able to get insured through the federal high-risk health insurance pool or a state program. Keith suggests visiting Coverageforall.org to see what programs are available in your state.

Emily Beaver is a San Francisco-based freelance writer who covers healthcare issues. Her writing has appeared in the Huffington Post and Youth Radio’s Generation Invincible series.