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Health Insurance Options for People Under 65

The majority of individuals and families have health insurance through their employers. You’re likely best off with your employer’s group plan than any other option available to you. Group coverage is easier and much less expensive to get than private insurance. Plus, your employer may pay most or all of the cost for you, and you can’t be denied coverage. However, if you change jobs, get laid off, or are fired, you can lose your group health insurance. If you find yourself without employer-sponsored health insurance, the following options may be available to you:

  • Individual health insurance: Perhaps your employer doesn’t offer health insurance, or you’re self-employed, a student, or retired before age 65. If you’re relatively healthy, you should purchase an individual health insurance policy.

    Certain health conditions may be excluded from coverage for a period of time. In some circumstances, pre-existing health conditions will be covered; however, your cost for insurance can be substantially higher than it would be if the pre-existing health conditions weren’t covered. Each insurance company may treat pre-existing health conditions differently and can deny you coverage altogether.

    Paying the extra cost and obtaining full coverage is generally better than having a pre-existing condition excluded from your health insurance policy.

  • COBRA: A provision in the law requires almost all employers to allow their terminated employees to continue group insurance coverage for a period of up to 18 months through a program called COBRA. However, you must pay 100 percent of the cost of the insurance.

    As your COBRA benefit period nears its end, or you get tired of paying those high premium rates, you need to search for group health insurance on your own. Generally, employer-sponsored plans (which is still who your COBRA coverage is through) have very low or no deductibles and minimal copayments. Simply by raising the deductible and copayments — bearing more of the risk yourself — you could dramatically reduce your insurance costs.

  • HIPAA: The Health Insurance Portability and Accountability Act (HIPAA) of 1996 requires that states provide at least a minimal coverage after you exhaust COBRA benefits, as long as you haven’t had any extended lapse (generally a break of 63 days or more) in coverage. Premiums under HIPAA may be two to three times what they would be for a standard-rate policy. HIPAA policies are typically an option of last resort for many people without employer-provided health insurance; however, HIPAA is still better than no health insurance at all. Each state has its own HIPAA rules, so contact your state insurance department before dropping any current coverage.

  • Your state’s high-risk health insurance pool: If you're medically uninsurable due to significant health problems, your best option may be to apply for coverage through the high-risk pool in your state, if it's available. Only 33 states have high-risk pools that provide coverage if traditional health insurance providers reject you. For more information about whether your state has a high-risk insurance pool and how it works, contact The National Association of State Comprehensive Health Insurance Plans or your state insurance commissioner’s office. Most states have their insurance premiums capped at 125 percent to 150 percent of the cost of a standard policy.

    Even if your state has a high-risk insurance pool, you might not be able to obtain insurance immediately because there may be a long waiting list.

  • Medicaid and other state-based healthcare programs: If you’re financially destitute, Medicaid is the nation’s largest program providing healthcare services to low-income individuals and households. Each state’s Medicaid income, eligibility requirements, and benefits vary. Check with your state for the specifics on Medicaid as well as other state-based programs.

  • State Children’s Health Insurance Program: This program provides healthcare coverage to children when their families don’t qualify for Medicaid because they make too much money.

  • Federally funded community health centers: These provide healthcare assistance to the needy. You can call 800-ASK-HRSA (800-275-4772) for more info.

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