Four big blunders young adults make with their health insurance

  • About 60 percent of young adults say monthly premiums are a top consideration when shopping for insurance.
  • More than 4 out of 10 adults aged 18-34 said that a fair price for insurance coverage was no more than $100 a month.
  • The tax penalty for having no coverage sunsets in 2019, but is in effect now.
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Here's another worry on the minds of new college graduates and other young adults: What's going to happen to your health insurance now that you're on your own?

A recent survey by eHealth, an online health insurance broker, found that the 18- to 34-year-old set had a number of misconceptions when it comes to shopping for insurance coverage.

Close to half of the young adults in this age cohort said that "$100 or less" was a fair price for a single adult to pay for insurance coverage, the poll found.

"Young folks, especially if you're talking about people who have just graduated, many of them have been under their parents' plan," said Lisa Zamosky, senior director of consumer affairs at eHealth.

In comparison, the national average monthly health premium for individuals who bought their coverage from eHealth during the last open enrollment period was $440.

EHealth conducted its survey in April, polling 1,705 of its customers.

Dodging the health-care tax penalty

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Congress repealed the Affordable Care Act's individual mandate in 2017, doing away with the requirement that people maintain minimal essential health insurance or else pay a tax penalty.

Here's the surprise: Though the tax penalty will sunset in 2019, it's currently still in effect. That means if you don't have coverage in 2018, you'll be on the hook for a penalty when you file your taxes next spring.

The penalty for not having coverage in 2017 was $695 per person without insurance ($347.50 for each child), or 2.5 percent of your household income, whichever is greater.

Failing to consider what they need

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The survey showed that while nearly 7 out of 10 adults aged 18 to 34 say that all health-care plans should cover maternity care, only 38 percent said they were willing to pay more.

Congress and President Donald Trump have paved the way to expand access to short-term health insurance plans.

These policies are different from plans that are compliant with the Affordable Care Act. For instance, short-term policies can exclude coverage for pre-existing conditions, can impose lifetime and annual limits, and aren't required to cover essential health benefits — including mental health care, preventive care and maternity care.

Still, premiums are lower for these short-term policies: They can run about 20 percent or less than the premium for the cheapest ACA-compliant bronze plan, according to the Kaiser Family Foundation.

Nearly 60 percent of survey participants said that affordable monthly premiums were their first consideration when shopping for coverage. This shouldn't be the only thing customers examine, Zamosky said.

"You really need to look at the full scope of the cost: What's covered relative to what you need? What is the deductible?"

Not knowing who's 'in network'

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If you move to another state while remaining on your parents' plan, prepare to face higher costs.

Health plans negotiate prices with doctors and hospitals who are within their network. However, if a customer sees a provider who is "out of network," the plan either won't cover the service or will pay a smaller portion of the bill.

That means it's up to the customer to cover the higher cost out of pocket.

Dragging your feet to sign up for coverage

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If you're about to turn 26 and age out of your parents' plan, start working on finding your own coverage either through an employer or through an individual policy.

"When you first graduate from college, you might be moving or looking for a job," said Zamosky. "Health insurance is often not at the top of the list."

Adult children whose parents purchased a plan on health insurance exchanges can keep their coverage until Dec. 31, even if they turn 26 in the middle of the year.

Twenty-somethings who are under their parents' coverage via a workplace plan, however, lose coverage the month they turn 26. They are eligible for a special enrollment period, during which they have 60 days prior to losing coverage and 60 days after that to purchase a plan.

If you miss the window, you can look into short-term plans. They won't be as robust, but they are better than nothing.

"When your life is in upheaval, the time goes by fast," said Zamosky. "Just take care of it today."

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