Cap and Gown and Insurance
This is the month filled with the joys of graduation. The proud holders of diplomas stride across stages of high school auditoriums and march in processions on leafy college campuses.
But let us offer a sober note of reality. If the happy graduate--heading for a week at the beach, for example, or traveling on a camping trip with friends--gets into a car wreck or falls down a ravine, who will pay the doctor and hospital bills?
A little advance planning can avoid a pain in the wallet for the graduate and the parents. When families have a group policy, the coverage for children eventually hits a cutoff point.
This applies both to policies a parent gets on the job, as well as coverage obtained by self-employed workers. Either way, the dependent children become too old to be covered. Typical policies end when a child reaches age 19. If she decides to go to college, the coverage will be extended to age 22 or 23, but she must provide proof she is a full-time student.
Most people don’t realize that the family health insurance will end abruptly for their adult children, said Michael Chee, a spokesman for Blue Cross of California. And the students themselves aren’t giving it much thought. “Nobody educates them as they leave school and enter the work force,” Chee said.
If a student is going to college, he’s got to supply the parent’s insurance company with a letter from the university attesting to his full-time status as a student. Someone who graduates college at 21 and goes to work would lose coverage when she gets the diploma. But if she attends graduate school, the coverage would extend to age 23.
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Because even an emergency room visit to treat a foot injured in a pickup game of basketball can generate a big bill, nobody should go without coverage.
Let’s assume the happy graduate, either from high school or college, is going to take a few months off before starting a new job. The job has health insurance, but it won’t take effect until a month after the graduate goes to work. Meanwhile, she has celebrated her graduation and is now “aged out” of the family’s group policy.
The situation calls for a temporary insurance policy, short-term coverage to provide protection until the coverage at work begins. The graduate will buy an individual policy as an adult.
Because graduates are typically healthy, insurance is easy to get and is comparatively cheap. A policy with a $500 deductible would cost about $70 a month, according to Jim Armitage, a broker with Arroyo Insurance Services in South Pasadena. This is a major medical policy, covering virtually all expenses charged by doctors and hospitals.
For those interested in even cheaper protection, Blue Cross offers a stripped-down policy covering only hospital bills. It has a $1,000 deductible and costs about $30 a month. This is catastrophic protection, offering security against the unexpected sudden illness or accident leading to a hefty bill from the hospital.
Most jobs have a one-month waiting period before the group health insurance coverage begins, so the graduate should keep the temporary policy through the first month at work so there is no gap in coverage.
An individual health insurance policy is subject to medical underwriting--that means the insurance company can turn anyone down for medical reasons. By contrast, the law requires that group insurance cover everyone. If a company offers health insurance to its employees, all the workers--regardless of health problems--must be covered, without discrimination and without extra charges.
For the graduate with a health problem, the market for individual insurance policies might be prohibitively expensive, or even closed entirely.
But there is a safety valve for coverage: the federal law known as COBRA (Consolidated Omnibus Reconciliation Act), written to make it easy for workers and their family members to continue group coverage after the worker leaves the job or gets a divorce. When the dependent children of the worker become too old to qualify under the family policy, COBRA will provide extended coverage for 36 months.
COBRA won’t be cheap--the child is now considered an adult for insurance purposes and must pay the full cost of an adult’s coverage through the parent’s company. But it offers a guarantee of insurance that might not otherwise be available. And it gives the young worker who has a health problem some protection until she finds a job with health insurance.
COBRA is the guarantee of last resort--no matter what health problems the young adult has, she is guaranteed coverage.
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If she went into the market and sought to buy an individual policy, she could face a rejection. Some health conditions--such as cancer, diabetes, or having been rejected previously for insurance coverage--will make it impossible to buy a policy.
But there are lots of medical problems in a less clear status, where insurance companies might differ in the willingness to offer an individual policy to a graduate. For those who are uncertain, the best bet is to take the COBRA coverage for a month or two, and go out shopping in the individual insurance market. If they get approval for a cheaper individual policy, they should grab it.
It is vital to keep a seamless web of coverage, especially for those with continuing health problems. If someone moves from coverage at college under a family policy to coverage on the job, there won’t be any exclusions for preexisting medical conditions (something you were treated for prior to starting work). But if there was a break in coverage for more than 63 days, the new employer could make the graduate wait up to a full year before covering the preexisting medical condition.
When you’re thinking about the cap-and-gown ceremony, take a moment to make sure the graduate has an insurance policy to accompany the diploma.
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Here are some tips for people getting skilled rehabilitation services under Medicare in a nursing facility. Patient advocates are hearing lots of complaints that nursing homes, under pressure from Medicare to control costs, are stopping the therapy, saying the patient has reached a “plateau” or has stopped improving.
That’s not a sufficient reason under the federal law. Here is the government rule: “Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.”
The typical patient of this type-- someone getting treatment from physical therapists, occupational therapists or speech pathologists-- might be an individual who had a stroke and spent a few days in the hospital and now is recovering in a skilled nursing facility. Or someone who had a hip replacement and is regaining strength and function.
After a person has spent three days in a hospital and goes to a skilled nursing facility, Medicare will pay for 100 days of coverage. The first 20 days are free, and the patient pays $97 daily for the next 80 days.
If the nursing home wants to cut off therapy services, first check with the doctor and confirm the order prescribing skilled services. If the nursing home still wants to terminate therapy, ask for an official “Notice of Non-Coverage.” Check the box in the notice indicating that you want to appeal the decision. The insurance carrier processing Medicare claims in your area will handle the appeal. Meanwhile, the nursing home can’t charge for the continuing therapy.
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Bob Rosenblatt welcomes your questions, suggestions and tips about coping with the changing world of health care. You can contact him by writing Bob Rosenblatt, Health, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or by e-mailing bob.rosenblatt@latimes.com. Health Dollars & Sense runs the second Monday of each month.
