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Turning 27…What are my insurance options?

Posted on: November 7th, 2012 by Kristen Marie

Dear COBRA Insurance Direct -

I have been very fortunate the past 27 years of my life to be covered under my father’s health insurance policy. Not only have I been covered, my parents have continued to pay the health insurance cost for me and never once asked that I send them a check. Now on the verge of reaching my 27th birthday, I have to find my own health insurance plan. I currently am self-employed and trying to launch my own internet business.

In terms of a plan – I am pretty healthy but like to go to the doctor when something comes up. My insurance plan with my Dad was awesome – gym membership, mental health services, any doctor, any hospital – you name it, the plan had it. I don’t need all the same bells and whistles, but I would like something that offers good coverage and that I can depend on. Do you have any ideas on where I should start looking for insurance? Is COBRA a good choice? I have a pretty limited budget.

Thanks -

Trying to avoid my 27th birthday

Dear Trying to Avoid My 27th Birthday,

First of all it is great that you are thinking about this ahead of time. All too often people don’t think about this until it is too late and they have already let their coverage lapse. In your situation you have a few options for health insurance that could help you maintain the kind of coverage you want at a price you want. It’s a good idea to explore each one and find the plan that best suits your needs. Here’s an overview of your options:

  • COBRA Insurance: Under the current laws, it sounds like you would likely qualify for COBRA given your father’s plan covers at least 20 full time employees. Under COBRA you could maintain the exact same insurance plan you’ve had for up to 36 months. The main advantage of this – you get to keep the great plan your Dad has. The main disadvantage – it will probably be really expensive. Under COBRA you will be responsible for paying the entire premium yourself plus a 2% administration fee. To find out the exact amount, contact the health insurance company and inform them you are losing your dependent status and want to know how much it will cost to continue their plan with COBRA. Based on the plan details you shared, likely this will be $400 or more monthly.
  • Private Insurance: The second option to explore is a private insurance plan. Likely since you said you are healthy and you are young, you can find a pretty affordable plan with good coverage for around $125-$150 per month. These plans are offered by major companies like Blue Cross, Aetna, and others and are able to offer pretty affordable care to people who are healthy. Under these plans you will be able to go to the doctor, fill prescriptions, etc. but they likely won’t cover everything your Dad’s plan did. Find out more about private plans, coverage, and prices.
  • Trade or Alumni Organization Insurance: Depending on your industry and your educational past, you may be able to find an affordable health insurance plan through these organizations. Many alumni associations offer health insurance and many trade organizations also do. One of the most popular is the Freelancer’s Union. They provide coverage to lots of people in your situation.

No matter what you decide, it is incredibly important that you maintain your insurance company. Having a lapse in care can disqualify you from future plans and make future insurance much more expensive. Moreover you never know when illness will strike and you will need your health insurance.

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