Affording a plan on minimum wage

I am 25 and still on my parents’ health plan.  I work almost full-time, earning minimum wage.  I was worried about what to do for health insurance when I turn 26.  Now, I’m even more worried because I have to have health insurance because of health reform – right?  There’s no way I could afford to buy health insurance on my own, at my income.  What can I do?

Worried Sick

Dear Worried Sick,

First, don’t worry yourself sick – it’s bad for your health and it doesn’t help fix anything!

Second, you have a few options to choose from.  When you turn 26, your parents’ plan will offer you COBRA coverage (unless their employer is one of those rare exceptions and doesn’t offer COBRA).  The COBRA coverage may be a reasonable price, and your parents may be willing to help you pay for it, since they are paying for your coverage now.

Before you go with that plan, you should check the prices for individual coverage.  Individual coverage is what you buy outside of an employer group.  You are young and the price for an individual plan may be lower than the COBRA plan.

If neither of those is affordable, you can go without health insurance.  You didn’t mention having any ongoing health problems, so this may be an option – though not a good one.

You are correct that you will have to have health insurance in 2014 or pay a tax.  In 2014, you will have a few more options.  At your income, you may qualify for Medicaid; each state is deciding whether to offer Medicaid to people who earn less than 133 percent of the Federal Poverty Level (FPL).  A family of one can earn $14,856 in 2012 and be at 133 percent of FPL.    Watch for news about this option in your state.

Also in 2014, you will have a new place to buy health insurance – called an exchange.  The exchange will make it easier for you to shop for plans and compare coverage.  You would also get discounts on the cost – called premium credits — based upon your income.

After all of that, you can still decide not to buy health insurance or to enroll in Medicaid.  You would pay a tax if you have no health insurance.  The tax is $95 in 2014.  It goes up over the next several years.

I hope you are less worried now.

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.