Which insurance plan is best for me?
Are students a special case?
Where should I go? Who should I ask?
Are you signing up for health insurance for the first time?
Doing anything for the first time can be stressful. Signing up for your first health insurance plan is no exception; other stressful events often coincide. In 2024, over twenty million US citizens enrolled in personal ACA-compliant health insurance plans – including three million for the first time.
The numbers will likely be even higher in 2025, so if you are planning to sign up for the first time, you can be reassured that you are not alone, and that state and private health exchanges are there to help you find the best plan to meet your financial and health needs.
In many cases, signing up for the first time is caused by an event that creates a special (personal, unique) enrollment period (SEP). The timing and length of this ‘opportunity window’ is determined by the nature and date of the event itself.
Qualifying Life Events QLEs) that trigger SEPs and a possible need to enroll individually for the first time include: –
- Aging off a parent’s (or guardians’) plan (currently age 26)
- Losing employer-sponsored coverage, e.g., resignation, termination
- Changes in family circumstances, e.g., marriage, divorce, birth or adoption
- Change of residence to an area not covered by your existing plan (either as a dependent or plan holder), e.g., on becoming a student
Suppose you are considering health insurance as an individual for the first time; it is likely the consequence of one of the above QLEs. You have almost certainly been insured on an employer-sponsored scheme or as a dependent (spouse or child) on a private or sponsored scheme.
In either case, others will have made many decisions determining your health insurance coverage. This may be the first time you have faced the full range of factors that influence your choice of coverage and the federal and state subsidies that make qualified health plans (QHPs) ‘affordable.’
Which insurance plan is best for me?
There is no simple answer to this question. However, the first four things that any advisor will have to know are your age, location (zip code), family status, and tobacco usage. Any further information helps your advisor to consider those plans which offer you the type of coverage that best meet your needs or preferences E.g., doctor, consultant and medications or prescribed drugs. Not least, an advisor will consider your income and ensure that you optimize federal and state subsidies.
An advisor will also take into account the extent to which you are prepared to share the cost of your healthcare with your chosen insurance provider. Whichever plan you choose there will be charge (copay or co-insurance) when you use an insured service or purchase an insured medication /prescription drug. The amount of that charge (and the annual maximum) is determined by your chosen plan. The reason for this is that if the service or medication were provided without charge, demand would be unlimited and consequently premiums would be unaffordable.
Your premiums, the amount you pay each month to keep your health insurance plan in force, are determined by several factors: –
- choice of insurance provider
- choice of plan type, i.e., HMO or PPO
- choice of metal tier* (how you and your insurer divide the total cost of your insured medical and care costs)
- your personal details – age, zip code, family status, and tobacco usage
* Four metal tiers describe roughly how insurance plans split the costs between the insurer and the consumer: –
| Metal Tier | Insurer % | Consumer % |
| Bronze | 60 | 40 |
| Silver | 70 | 30 |
| Gold | 80 | 20 |
| Platinum | 90 | 10 |
Your premium is also influenced by the amount of your deductible (set out in your plan.)’ Deductibles are the amounts you must pay ‘out-of-pocket’ either in co-insurance or co-payments until your insurance steps in to pay 100% of your covered healthcare costs.
Generally, the more significant the share of the costs you are prepared to accept, the lower your premium will be.
Are students a special case?
Yes, students are a special case because many colleges and universities offer students sponsored plans which typically comply with the ACA provisions including the ten essential services. However, remaining on a parent’s (up to age 26) or a spouse’s insurance (especially if it is sponsored by an employer) is usually the most cost effective option.
However, there are limitations. If the University or college is ‘out of state’ and the parent’s (spouse’s) has an HMO plan it is important to establish that there are in-network providers in the area. If not, the student will need to look at other options.
Among those options is to choose a bronze plan (above) which may be even more cost effective than a School-Sponsored Student Health plan if the student has an income (working their way through University) and qualifies for premium tax relief.
Where should I go? Who should I ask?
You could be exploring the possibilities of insuring yourself for the first time. Health insurance is a highly competitive business which offers the market a wide range of options. The choice can be daunting. A well informed, unbiased source of information is essential. The health insurance marketplaces, both state and private, independent agents and brokers can all make it easier to make an informed decision.
