Medical Insurance for Teens - Part 2

Written By Samarth Singh

by Kashvi Mahesh

Introduction

In the first part of this article, we looked at some of the basics related to health insurance: the concept itself, key terms used, the range of plans designed specifically for teens, and its importance as a financial aspect. Now, having established these foundations, in this article, we will explore how you can take action today to maximise the benefits from your insurance plan, learn about the rights as a young patient, and be better prepared for becoming independent when it comes to health insurance.

These skills of knowing your rights, taking preventive measures, dealing with mental health issues, and preparing for adult life cannot be acquired without effort and thoughtfulness. Those young adults who successfully acquire them stand the best chance of securing their future financially.

Navigating Health Insurance as a Teen

Knowing Your Rights

Teens have their own rights in accordance with U.S. health laws. In some states, you have the right to receive certain health care services, like mental health treatment, drug abuse services, and reproductive services, without obtaining consent from your parents. This is referred to as the "minor consent" law, which varies considerably from one state to another.

Moreover, if you receive health insurance coverage from your parents, you have the right to request that any explanations of benefits letters be mailed directly to you instead of your parents. This is called "confidential communications." This is particularly relevant for teenagers who seek confidential health care services (Guttmacher Institute, 2023).

Using Preventive Care

A great decision that teenagers can make regarding finances is to take advantage of their insurance to take preventive measures. Annual medical exams, oral examinations, eye exams, and vaccinations are generally included in all ACA insurance policies. The purpose of preventive care is to prevent any health issues by treating them early, and thus it is cheaper and more effective than curing serious diseases.

According to the American Academy of Pediatrics, teens should undergo annual well-child visits until the age of 21 (AAP, 2022).

Mental Health Coverage: A Priority for Teens

Mental health care is one of the major health issues among adolescents. As mentioned by the National Institute of Mental Health (2022), roughly 49.5% of adolescents between 13 and 18 years of age face the problem of having a mental health disorder sometime during their teenage years. However, there are various reasons why teens refrain from seeking help for such disorders.

One should be aware of the fact that all types of health insurance have to offer health benefits to include mental health problems by virtue of the Mental Health Parity and Addiction Equity Act (U.S. Department of Labor, 2023). Should there be any problem of cost involved, consider the following solutions:

  • Ask your insurance provider to provide you with a list of providers who accept your insurance.

  • Find out about community mental health clinics that have sliding payment scales according to your income level.

  • Find out whether you can use an online therapy program via your insurance.

  • In case of privacy concerns, ask for “Confidential Communications” with your insurance provider.

Mental health treatment should not be viewed as a sign of weakness but as financially sound behavior. Treatment at an earlier stage of mental illnesses is definitely much more cost-effective in every possible sense of the term.

Preparing for Independent Coverage

Moving on from Your Parents' Plan

The age of 26 is a crucial point in your insurance story since by then, you will be required to seek out an insurance plan of your own if you are not currently enrolled in your employer's group insurance plan. Having your coverage end at 26 years old is considered a Special Enrollment Period, which allows for enrollment within 60 days of the event. The options you will consider include:

  • Employer group health insurance: If your company provides insurance benefits, this would usually be the most affordable option. Make sure you review the terms of coverage of each plan offered.

  • Marketplace Plans: Individual marketplace plans can be found on HealthCare.gov, along with federal financial assistance based on your income. Shop at least two or three plans before signing up.

  • Medicaid: With very low incomes, you might be eligible for government assistance programs like Medicaid. The expansion program for young people, created under the ACA, is now widely available.

Do your research on insurance before reaching 26, since losing coverage could result in serious financial problems.

Health Savings Accounts (HSAs)

If you have a Health-Deductible Plan, then you will be able to enroll in a Health Savings Account (HSA). An HSA will let you deposit pre-tax funds into an account that you can use to pay qualified medical costs. The tax benefits are extraordinary:

  • Contributions to the account lower your taxable income for the year that you make them.

  • The growth of the funds inside the account happens without any taxes.

  • Taking out money for qualified medical expenses from the account will cost you nothing.

  • The money does not expire in your account at the end of each year.

For 2024, an individual could save up to $4,150 per year in an HSA (IRS, 2023). Younger individuals who do not make use of the health-care system as often would be wise to open an HSA. You will be saving for medical emergencies while cutting down your taxes.

Good Insurance Practices from Early Years

The way that you handle your finances during your teenage years will influence your approach to your personal finances for the remainder of your life. Some good practices regarding health insurance include:

  • Going through your Explanation of Benefits every time you visit a doctor or specialist.

  • Organizing an electronic or hard copy file containing all your insurance documents and information about any procedures.

  • Contacting your insurance company to ensure your planned treatment is within your policy terms and to receive price estimates.

  • Using network services as often as possible to avoid additional expenses.

  • Going through your insurance policy every year during its renewal period.

Conclusion

Health insurance may seem like an abstract adult concern, but for teenagers, understanding it now is one of the most powerful investments in their financial future. Across this two-part series, we have covered the basics of how insurance works, the coverage options available to teens, the financial stakes involved, your rights as a patient, and the practical steps to prepare for independent coverage.

Financial literacy is not just about money in a bank account. It all comes down to understanding the systems that control your finances, and the systems are many, including one that costs more money than any other system – the healthcare system. Teenagers who know how to deal with health insurance are teenagers who can help themselves to steer clear of debt and secure good health in the process.

Make an effort right now. Look at what you already have in place and educate yourself. It will be worth it.

Bibliography

American Academy of Pediatrics (AAP). (2022). Recommendations for preventive pediatric health care. American Academy of Pediatrics. https://www.aap.org/periodicityschedule

Guttmacher Institute. (2023). Minors' access to contraceptive services. Guttmacher Institute. https://www.guttmacher.org/state-policy/explore/minors-access-contraceptive-services

Internal Revenue Service. (2023). Publication 969: Health savings accounts and other tax-favored health plans. IRS. https://www.irs.gov/publications/p969

National Institute of Mental Health. (2022). Mental illness: Any mental illness (AMI) among adolescents. U.S. Department of Health and Human Services. https://www.nimh.nih.gov/health/statistics/mental-illness

U.S. Department of Health and Human Services. (2023). Understanding the Affordable Care Act. HHS.gov. https://www.hhs.gov/healthcare/about-the-aca/index.html

U.S. Department of Labor. (2023). The Mental Health Parity and Addiction Equity Act. Employee Benefits Security Administration. https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/mental-health-parity

Samarth Singh
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Medical Insurance for Teens - Part 1