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Do Millennials Need Health Insurance?

Image: Flickr / Virginia State Parks

Whether millennials need health insurance or not, we’re seeing declining rates in uninsured individuals in this demographic. For those without coverage, cost remains an issue.

Compared to previous generations, millennials have more options available when it comes to securing health insurance. For one, the Affordable Care Act has enabled individuals to remain on their parents’ health insurance until the age of 26. This provision, along with things like Medicaid expansion and the employer mandate, have attributed to steady declines in the rate of uninsured; yet, a sizable portion of millennials do continue to remain uninsured.

A recent survey from the Transmerica Center for Health Studies (TCHS) shows that the population of uninsured millennials has diminished over 10 percent since 2013, falling from 23 percent to 11 percent in 2016. Of the remaining 11 percent without insurance, the majority (55 percent) report not having a good understanding of the healthcare options available to them. Employer-sponsored insurance; remaining a dependent on their parent’s plan; Obamacare plans; and Medicaid are all options for a millennial to sift through. However, at the youngest and presumably healthiest of their lives, it begs the question: do millennials need health insurance?

Pay the Obamacare Penalty or Buy Health Insurance?

Jennifer Hugenberg is a 25-year-old accountant living in Chicago. As she prepares to move off of her parents’ insurance plan, she has concerns about affording the future cost of her healthcare. Says Hugenberg:

“I have a pre-existing condition that requires a lot of trips to doctors. Medical supplies for a three-month period can be between $500 to $1,000. I’ve been trying to pay more attention to the bills for those items to plan ahead so I’m not blind-sided but it’s still a major concern of mine.”

And Hugenberg isn’t alone. Of the uninsured millennials surveyed by TCHS, over 60 percent said they opted to pay the Obamacare penalty because of cost. For 2017, the penalty for not having health insurance is the greater of the two options: 2.5 percent of household income or$695 per adult ($347.50 per child). Compared to the cost of monthly premiums for plans offered on the ACA exchanges, it’s no surprise that some opt to pay the penalty.

Most millennials report that a monthly premium over $200 is unaffordable. In 2013, the Kaiser Family Foundation reported that 43 states had monthly premium rates over $200 per month for state-based marketplace plans. More recently, the national average for monthly premiums was $393 in the first two months of 2017 – that’s a 99 percent increase in three years, which is unbearable for those just beginning to build the foundation of their financial future.

Insurance Doesn’t Equal Affordable Healthcare

It seems even more financially unfeasible to consider insurance when higher out-of-pocket costs are placed on consumers. A study done by Benefitfocus reported that millennials participate in high-deductible health plans more so than any other generation, meaning they face higher deductibles, coinsurance and out-of-pocket maximums than they would on a regular PPO plan.

The Risks Involved with Remaining Uninsured

While paying the Obamacare penalty in lieu of healthcare coverage seems like a good idea, you’re likely underscoring the value of health insurance. Even if you’re the picture of perfect health, nobody can predict when an accident may occur that requires extensive medical care. By remaining uninsured, you’re at a higher risk for filing for bankruptcy in the event you incur medical expenses you can’t pay back. There is no denying that healthcare is expensive and medical bills add up quickly. Consumer Reports recently reported that bankruptcy filings have dropped by 50 percent since the implementation of the ACA, and experts agree that the increase in the insured population played a part.

Insured or not, millennials are taking steps to avoid healthcare costs. Most commonly, they are taking vitamins or supplements to help prevent illness. An additional 10 percent are skipping routine or preventative visits to save on costs (which is puzzling since the ACA mandates free preventative care).

Regardless of how you are attempting to save on cost, studies prove that insurance coverage leads to better health outcomes. This is in a large part due to the timeliness of catching a disease. Coverage can mean the difference between detecting cancer in its primary stage versus an incurable stage. It can mean improved treatment for anxiety and depression, two of the most common health conditions among millennials, leading to better quality of life. Being pennywise now might have lasting impacts on your health in the long-term.

How to Get Insured

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If you are unable to get insurance through your employer or are too old to stay on your parents’ plan, start by going to HealthCare.com to see if you can enroll in a state-based Marketplace plan (although, you’d need a qualifying life event to enroll outside of the open enrollment period). As you fill out the application you’ll also be screened for your ability to get monthly premium discounts. You can also consider short-term health insurance, which provides you with flexible coverage at least until you find a fuller solution.

Rachael Forster: Rachael is a regular contributor to HealthCare.com. She's a health and wellness writer who is passionate about healthcare policy, yoga, and travel. She lives in Chicago.

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