Young Adults: Your Guide to Affordable Health Insurance

Navigating your 20s often means making big life choices around school, family, and career. But no matter what path you choose, one thing's for sure — having a health insurance plan can help protect you for the road ahead.

Getting and staying covered is an important step toward building your future. It helps you remain healthy and protects your bank account. Plus, in California, it’s the law. Depending on your circumstances, there are different ways to find a health plan. From getting covered through your college or employer to selecting an affordable health plan with the help of Covered California, here’s a look at health insurance options for people in their 20s.

Why Health Insurance Is Important

Health insurance is critical at any age. For starters, it gives you peace of mind and helps safeguard your finances in the case of illness, injury or accident. Fixing a broken leg can cost $7,500 out of pocket. Read on to learn more about the benefits of staying covered — and why health insurance might be more important than you think.

Protect Your Health

Health insurance is an investment in a healthy future. All plans certified under the Affordable Care Act (ACA), also known as Obamacare, offer free preventive care. This includes annual screenings, injections, and exams that can help detect or even prevent serious health conditions early. Depression screenings, sexually transmitted infection (STI) counseling, birth control, and breast cancer screenings for women are all covered at no cost.

Protect Your Finances

The risk of unexpected accidents or illness can put your finances in jeopardy. Without insurance, one visit to the emergency room can run $8,000 out of pocket, while a hospital stay may cost $43,000 or more. With health insurance, you have a buffer because the majority of your expenses should be covered, allowing you to recover without added stress. This financial security is not just about money; it's about peace of mind. Knowing you are protected also enables you to live with confidence, without the constant worry about the unknown.

Tax Penalty For No Health Insurance

Health insurance isn’t just a good idea. In California, it’s the law. If you elect to go without it, you may face a tax penalty at the end of the year unless you qualify for an exemption.

Health Insurance for Young Adults

There are different ways to get health insurance as a young adult. You may be able to stay on your parent’s plan, get health insurance through your employer, or explore other options. Here’s a look at different ways to get covered, so you can decide on the best option for you.

Student Health Plans

If you’re enrolled in college, your school may offer a student health insurance plan (sometimes called a SHIP). These plans tend to be inexpensive, and you can typically sign up before each term.

College plans differ from school to school, so it’s important to review the plan closely and make sure it fits your needs. For example, if you’re planning to go to school close to home and continue using your family doctor, that doctor or facility may not be in the plan’s network. Additionally, some plans only provide covered services during the academic year, which means you’d need to find short-term health insurance over summer break.

Staying On Your Parent’s Plan

If you’re under 26, you may be able to stay on a parent’s health plan. Thanks to the ACA, this opportunity applies no matter whether you go to school, have a job that offers health insurance, get married, or have a child. However, this may not be the easiest option if you move away from home. Some plans don’t cover routine medical care if you leave the state.

Employer-Sponsored Health Coverage

For some people, getting a job means getting health insurance too. Seven out of 10 people in the private industry workforce have access to a health plan, so it’s a good idea to see if your job comes with this benefit. With employer-sponsored coverage, you and your employer usually split the cost of the monthly premium for a health insurance plan.

Employers usually cover most of the cost, but if the options they offer are too expensive, you may find a more affordable plan through Covered California. The rule is that if the lowest-cost plan your employer offers is more than a certain percent of your household income, you can sign up for health insurance through Covered California. You may also be able to receive financial help.

Coverage Through Covered California

Covered California is a free service from the state helping millions of Californians get high-quality health insurance each year. Through Covered California, people of all ages — young adults included — can compare and select a plan. We also help you access financial help to lower the cost of your plan. Ninety percent of people who enroll receive financial help. Let’s take a look at how that works.

Financial Help for Health Insurance

Not only do most people who sign up for health insurance through Covered California get financial help, but many pay $10 a month or even as low as $0 for their health plan. The amount of financial help you get is based on how much money you make. It takes only a few minutes to get a quick quote.

There are two different ways to get financial help. You can get financial help that lowers the amount of your monthly payment (called premium tax credits). You can also get help to cover the cost of anything you might pay for out of pocket when you receive care (called cost-sharing reductions). Learn more about that here.

Health Insurance Tiers

There are four levels of coverage offered through Covered California, known as metal tiers: Bronze, Silver, Gold, and Platinum. All plans cover the same health benefits like preventive care, emergency services, doctor’s visits, and prescription drugs.

Bronze and Silver plans have the lowest monthly cost. You will pay more when you receive care, but if you don’t have a lot of ongoing health care needs, these may be more affordable long term. Gold and Platinum plans have higher monthly costs but you pay less for health care services. You can find what works for you and your budget using our Compare and Select a Plan tool.

Minimum Essential Coverage Plan

People under the age of 30 can also opt for a different kind of plan called a minimum coverage plan. Also known as catastrophic coverage, these insurance plans are designed to provide basic health care. Minimum coverage plans purchased through Covered California cover three doctor or urgent care visits per year with no out-of-pocket costs and free preventive care benefits. All other services are provided at discounted rates until you meet the deductible. (A deductible is the amount you pay for health care services before your health insurance kicks in.)

Keep in mind that financial help is not available for minimum coverage plans. Even if you don’t qualify for financial help, you may want to consider a Bronze plan, the lowest metal tier option, instead. The monthly cost of a Bronze plan is often about the same as a minimum coverage plan, but the deductible is much lower.

Medi-Cal

There’s also Medi-Cal, California’s Medicaid program. This public health insurance program offers free or low-cost health insurance for Californians who have limited income and resources. When you look at health insurance plans through Covered California, you’ll be able to see if you are eligible for Medi-Cal. Learn more here.

When to Get a Health Plan

Typically, the time to sign up for health insurance is during open enrollment. In most cases, there will be an open enrollment period regardless of how you’re getting covered — school, employer, parent's health plan, etc. Anyone eligible for coverage can get or change their plan during this window. For Covered California, open enrollment is from November 1 through January 31. If you don’t sign up during this time, you might not get the chance to get covered until the following year.

Keep in mind there are some exceptions. If you go through a major life change, you may qualify for a special enrollment period. What counts as a qualifying life event will depend on where you purchase your health insurance. Different employers and schools have separate rules, so it’s best to check. For Covered California, qualifying life events include turning 26 and getting kicked off your parent’s health insurance, losing a job and the employer-sponsored coverage that came with it, getting married, moving, and more.

Don’t Wait to Get Health Insurance

As you move forward into the next stage of your life, it’s important to have health insurance to protect your physical and financial health. You may be able to get a plan through school, work, or a parent’s health plan. When you need another option, Covered California is here to help. It’s easy to shop for plans, compare benefits, and get an estimate of monthly premiums and financial help. Have questions? Covered California’s live chat feature, CiCi, is ready with answers anytime. If you need more personal assistance, certified enrollers are available as well.