Many factors help determine the premium you will pay for health insurance. Age is certainly one of those factors, and younger folks pay lower premiums. But the 2010 Affordable Care Act, or ACA, has reduced or eliminated many of the factors that once drove premiums higher at every age. Your or your family's existing policy might cost considerably more than would a new one from a state’s health insurance marketplace set up under the ACA.
Children’s Health Insurance Program
Young folks up to age 19 might qualify for enrollment in the Children’s Health Insurance Program. Under this program, families with modest income can insure children even if they earn too much to qualify for Medicaid. CHIP coverage is low cost. Each state administers its own CHIP, and the qualification rules and premiums can vary. Checkups and dental visits are always free. Under CHIP, families don’t have to pay more than 5 percent of their incomes for coverage. Persons enrolled in CHIP who reach age 19 should expect coverage costs to rise, although they might be able to keep costs relatively low by joining their parent’s coverage.
Up to Age 26
Many insurance policies offer family coverage. If your parents own such a policy, you can stay on it until you reach age 26. You can remain on the policy even if you are married, living away from home, attending school, financially independent or eligible for an employer’s plan. Family rates are typically lower on a per-person basis than those you'd pay if you owned your own policy. If you want your parents to add you to their health insurance plan, you’ll have to wait until the next open enrollment period, although the plan might offer special enrollment opportunities.
Up to Age 30
People under 30 years old with limited incomes can qualify for “catastrophic” health plans. If you become sick or injured, these plans kick in after you pay a rather sizable deductible, usually several thousand dollars. After that, the policy pays for essential health benefits. The premiums for these policies are low because of their high deductibles. If you buy a catastrophic plan through your state’s health insurance marketplace, you’ll receive three free primary care visits per year, and you’ll also receive free preventative benefits. You can expect higher premiums once you reach age 30. However, you might be able to continue your catastrophic policy if your income remains low.
Piling on the Premiums
Pre-ACA policies on average charged five times more to older participants than they did to younger ones. One reason is that older folks are more likely to need medical care. Older “grandfathered” policies that existed before the enactment of the ACA in 2010 can continue to charge extra for pre-existing conditions. Some of these policies contain riders that specifically exempt coverage of certain conditions. If you or your family own an individual grandfathered policy, premiums can rise at the whim of the insurer.
A New Reality
As of the start of 2014, policies that are not grandfathered can no longer deny you coverage of your pre-existing conditions. However, children received this benefit when the ACA was first signed. When you buy a policy from the marketplace, you are not even asked about you medical condition or history. The one exception is tobacco use, which can hike up your costs. Age plays less of a role in marketplace policies, in which premiums for older participants can be no more than three times those paid by younger customers. Policy costs can vary state by state. If you qualify, you’ll receive a federal tax credit for your marketplace policy that can reduce your premiums by several hundred dollars each month. Individuals with income up to $45,960 qualify for the tax credit, and the qualifying maximum income levels rise with family size.
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