Best Cheap Health Insurance for Young Adults

Find the Cheapest Health Insurance Quotes in Your Area

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If you are a young adult, you may, for the first time, need to find your own health insurance policy. However, there are great options for those in their teens and 20s that provide comprehensive coverage at an affordable price. When shopping for health insurance as a young adult, you should consider your own specific situation with regard to your age, income and at what stage of life you are currently in. For example, a millennial who may be starting a family will require a different type of health insurance policy than a single person starting their first job and living alone. Therefore, it is critical to evaluate your own life and then carefully review policies so you can find the best option available.

Free health insurance options for young adults

We recommend first considering health insurance policies that you may be eligible for and have no cost. This includes either a company plan provided by your employer or being eligible for the federally funded Medicaid program.

Employer-sponsored health care

One of the best free or low-cost health insurance options for young adults would be acquiring coverage through an employers' health plan that is fully paid for. This is not as common as it used to be since health care costs are rising and employers are requiring their employees to pay a portion for the premium. However, employer-sponsored plans can still be a cheap option as most employers will pay the larger portion of the premiums for your health care. Typically, if you select employer coverage, the premium for the health care would be taken out of your paycheck pretax. Employer-sponsored health care will provide you coverage for yourself and any dependents that you have, which is similar to many other types of health care that you should consider.

Medicaid

Another free or low-cost option for health insurance, if you qualify, is enrolling in the federally funded Medicaid program. Eligibility for this program will depend on if your state has passed legislation to expand its Medicaid program. States that have expanded Medicaid allow any resident to enroll in Medicaid if their household income falls below 138% of the federal poverty level. As a young adult, enrolling in the Medicaid program would make sense if you are currently unemployed or work at a company that does not offer health insurance benefits.

Best private health insurance plans for young adults

If you do not receive employer coverage or have an income that is too high for Medicaid then young adults can still find comprehensive health insurance plans from other areas including:

  • State health insurance marketplaces
  • Off-exchange providers
  • Student coverage through a school or college

Health insurance marketplace plans

Cheap health insurance can be purchased through the health insurance exchange in your state if you are not employed and not eligible for Medicaid coverage. On the state exchanges, there are typically five different metal tiers that are offered: Catastrophic, Bronze, Silver, Gold and Platinum. The best metal tier will depend on your income and how healthy you are.

If you are a single young adult and are looking for a plan that would cover yourself, then the best health insurance would be a lower tier plan like Catastrophic and Bronze. These policies can work well for most young adults or young couples who have not started a family and only need basic health insurance coverage. Both of these health policies have cheap premiums but also a high deductible which makes them ideal if you expect low to zero medical costs. Additionally, Catastrophic health plans are only available if you are under 30 years old.

Silver metal health insurance policies have modest premiums and deductibles, and would be better suited for young couples who may have just started a family. The lower deductibles would allow you to get access to co-insurance and co-pays more quickly as you may be facing additional medical expenses due to a newborn or having a dependent. If you can afford higher premiums, a Gold or Platinum policy could be a good choice as these policies have the lowest deductibles.

A key component of marketplace plans is that they can provide premium tax credits if you have a household income that falls below 250% of the federal poverty level. Tax credits are used to reduce the amount that you would pay in premiums for your health insurance policy. In some cases, if you qualify for this subsidy, a marketplace plan can be much more affordable than employer-sponsored health care. Cost-efficient young adults with lower incomes can find this aspect of marketplace health insurance very valuable as this tends to decrease premiums to affordable levels.

Below, we have provided average sample individual health insurance quotes for a young adult in California. As you can see, Catastrophic and Bronze plans are the cheapest and what we recommend for young adults in great health and not many medical expenses. As mentioned before, if you are beginning to start a family, a policy like the Silver metal tier would be a better option due to the lower deductible.

Average Cost by Metal Tier

Off-exchange health insurance

If you do not qualify for premium tax credits, then we would recommend comparing private health insurance policies to find the most affordable options. In the private marketplace, you have the option to purchase full benefit policies similar to Obamacare marketplace plans. These policies differ in that you would be purchasing health insurance directly from the insurer or through an agent. Furthermore, off-exchange plans are not eligible for premium tax credits that are provided by the government.

Student health insurance coverage

An affordable option for health insurance for full-time students or recent college graduates would be to purchase coverage through your university. Typically, your college or school would offer you a health insurance plan when you first arrive on campus. You may want to consider this option if you are currently on a parent’' plan and the state where you attend school may not have a similar provider network available.

For example, say you and your parents lived in Michigan but you are planning on getting your education in Florida. If your parents' health insurance does not provide coverage in Florida, you would be without health insurance while getting your education. In this case, you could buy a cheap plan from your school for coverage.

Staying on a family health insurance plan

Young adults under the age of 26 have the option to stay on a parent’s health insurance policy. This can be a good health insurance option if your parents already receive health insurance through an employer or pay for an individual policy as you would not need to pay for premiums. If your parents need you to help with payments for the family health insurance plan, then the added cost of adding you will be similar to the amount you would pay in premiums for your own individual policy.

You can join or remain on a parent’s plan even if you are:

  • Married
  • Not living with your parents
  • Attending school
  • Not financially dependent
  • Eligible to enroll in employer-sponsored coverage

All states allow parents to keep any dependents on their health insurance plan until that child or young adult turns the age of 26. As an example, New York allows young adults to stay on their parents' policy until age 29 but the parent would need to pay a large premium. This would be free health insurance option if your parent allows you to be added to their plan.

Best short-term health insurance for young adults

Another off-exchange option you may want to consider is short-term health insurance, which can be bought directly from a health insurance provider. These are thin policies that do not provide the same level of benefits as robust Obamacare marketplace insurance or private insurance policies. However, short-term health insurance is a cheap and affordable alternative which can be useful for young adults with budget restrictions and fewer health care needs.

It should be noted, that short-term plans should not be considered if you need health insurance that covers all of the essential benefits. Furthermore, if you have pre-existing health conditions like diabetes, you could be denied coverage during the application process.

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