The American healthcare landscape continues to change before our eyes as new parts of the Affordable Care Act begin to take effect.
The changing landscape can be especially confusing if you're a young adult between jobs. Should you get back on your parents' insurance plan, sign up for COBRA insurance, find insurance through the new healthcare marketplace or get short-term insurance to fill the gap until you find a new job?
You Might Not Want to Be on Your Parents' Plan
Under the new federal healthcare law, you can stay on your parents' health insurance policy until you turn 26 years old. That applies even if you're married, are not living with your parents, are not attending school or are not financially dependent on your parents, according to Healthcare.gov.
But there are plenty of scenarios where you might not want to be covered by your parents' plan. If you live in a different state, for example, problems can arise. Your out-of-pocket costs could be higher if doctor visits were reimbursed at lower out-of-network rates under your parents' plan, or if your local doctors aren't in the network of that plan, according to an article in the Wall Street Journal. Or if your parents are nearing age 65 and planning to retire, Medicare won't cover you.
Also, if you're nearing the cutoff age of 26, it might be simpler for you to just find your own insurance and not have to mess with repeating the whole insurance process after your coverage terminates.
Why Short-Term Medical Could Be an Appealing Option
When you're in-between jobs, you're already under the stress of trying to find your next job. If COBRA applies to your previous employer, it must offer you COBRA coverage by law. However, with COBRA you usually have to pay 102% of the entire insurance cost yourself, including the employer's portion. You might find that COBRA is too expensive for your liking.
Short-term medical insurance helps you bridge the insurance gap until you're covered by a new employer. While you might be tempted to forego insurance as you seek your next position, you have to keep in mind that emergency medical situations can quickly rise in cost to thousands of dollars when you factor in an emergency room visit, testing, drugs or treatment. You probably can't afford to take that risk, especially since you're never sure exactly how long it's going to take you to find another job.