We experience many stages in life and each phase can affect healthcare costs. From turning 26 to retirement, it’s important to know your healthcare coverage options.
Let’s discuss some of the big life events that can change your healthcare costs.
Under the Affordable Care Act (ACA), young adults are allowed to stay on their parents health plan until they turn 26. They can be on the plan even if they don’t live with their parents - like when they go to college. In addition, if they get married and have children, they may be eligible to stay on the plan until age 26.
Once those 26 candles are blown out, young adults must obtain their own coverage. If you’re about to age out of your parent’s health plan, it’s time to figure out options. There are several ways to get insured, from enrolling in your employer's healthcare plan to purchasing insurance through the marketplace. Your 26th birthday allows you to purchase insurance during a Special Enrollment Period (SEP). The period lasts for 120 days, from 60 days prior to your 26th birthday to 60 days after.
Getting married is considered a Qualifying Life Event (QLE). You and your spouse - and any children you may have - can receive or change health care coverage as soon as you’re married.
While choosing health insurance isn’t the most exciting part of planning a life together, it’s worth taking time to carefully consider.
If you have your own health coverage and get divorced, you can keep the current plan you have. If you are covered under your spouse’s plan, you may no longer be eligible as a dependent - depending on your state law. You may also be able to negotiate keeping your spouse’s healthcare during the negotiation process.
If you are no longer eligible to stay on your spouse’s plan after the divorce, there are a few options you can take. You can sign up for an employer sponsored health plan, buy a plan from the marketplace or health insurance company, or use COBRA to keep the coverage you had while on your spouse’s plan.
Pregancy or Adoption
Having a Baby
Health Insurance Marketplace and Medicaid plans cover pregnancy and childbirth - even if you become pregnant before coverage begins.
Having a baby is a QLE, so you can enroll or change your health care coverage. If you enroll in a new plan, coverage can be effective from the day your baby is born. If you already have Marketplace coverage, you have two options: you can add your child to your current plan or change to a different plan that better fits your needs.
Adopting a Child
When you adopt a child, your health insurance provider is legally required to cover them as they would a biological child. Adoption is a QLE and you can add your child to your insurance plan once the adoption is complete.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prevents insurance companies from denying an adopted child coverage based on any preexisting conditions as long as the parents request enrollment within 30 days of placement.
Retirement is another stage of life that requires careful planning and forethought. If you previously had a job with health insurance, learn about the options you may have throughout retirement. Can you continue with your existing group plan? Would you be eligible to keep your current benefits through COBRA? These are the kind of questions you should ask your HR representative at your company as you’re preparing for retirement.
If you’re retiring before 65, you cannot be denied coverage for pre-existing conditions, thanks to the Affordable Care Act. However, you may pay up to $1,000 a month for premiums between the ages of 55 and 64 for healthcare coverage.
Once you turn 65, you can apply for Medicare. Once on Medicare, you’ll have options. Will you choose original Medicare or a Medicare Advantage Plan? There are pro’s and con’s to both to think about. The best place to get information is on Medicare.gov. You may still want professional help to decide, so plan to talk with an agent for the most in depth information.
Each stage of life brings new decisions to make to have the best healthcare coverage for our situation. Take time to learn your options for the stage of life you’re in.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.