In the market for insurance?
If you’re about to find yourself out of college and in the market for health insurance, take a deep breath. And then:
Learn the terms of your current coverage. If you haven’t done so already, check your current plan. You may have a grace period for a few months after graduation, you may be covered for graduate school, or the coverage age might be extendable, even if you’ve graduated.
Typically, coverage from a parent’s employer ends when college does, but in the last few years, at least 30 states have passed laws allowing employers to extend coverage. New Jersey has the longest extension -- until age 30. (No extension following graduation is permitted in California, unless the child is disabled.) Check the National Conference of State Legislatures’ website for extension rules.
This review is time-sensitive, though. If you’ve got a pre-existing medical condition, such as asthma, and stop coverage for longer than 63 days, you could be denied coverage for that condition under your next insurance plan, for a period of time. Or insurers in most states, including California, could choose not to cover you at all.
Consider COBRA. Once your insurance expires under a parent’s plan, you can still keep those benefits for up to 36 months by paying a little more than full cost -- up to 102% to include the employer’s cost of administering the benefit.
That can be pricey, however. The average yearly premium for an individual plan provided by an employer cost about $4,700 in 2008, according to data from the Kaiser Family Foundation. That’s steeper than the portion -- about $700 of the premium -- that an individual would pay under an employer’s plan, but often less than you’d pay for a policy on the open market. And staying with the firm’s insurance would let you stay with your own doctors, a bonus for anyone with an underlying health condition. (And, no, you won’t qualify for the short-term 65% subsidy announced a few months ago; that’s reserved only for the person who holds the job that provides the insurance, if he or she is laid off.)
Shop on your own. Ehealthinsurance.com, a large online retailer, is able to provide some managed-care policies for a little more than $100 per month in premiums for people with no underlying health conditions. It and other online sites, such as insure.com, can provide health insurance estimates from a broad array of companies.
After college graduation, Stephanie Ryan, 22, looked for a job that offered health insurance, but she recently began working as a freelance production assistant.
After “three scary months” of no insurance, when her coverage under her mother’s employer’s policy ended, she opted for a Kaiser Permanente plan that costs about $130 per month for the premium, with a $1,500 deductible and a $30 co-pay for doctor’s visits. But don’t assume your cost for a similar plan will be the same, says Kathleen Stoll, director of health policy at Families USA, a Washington, D.C., health reform advocacy group.
Insurers base the price on where you live and your personal history, and your cost won’t necessarily be the one that comes up first when you access an online health insurer’s website.
For more information on individual policies, go to HealthCareCoach.com, a site provided by the National Health Law Program, and type individual insurance into the search engine. The page also includes definitions of terms you’ll need to know, such as co-insurance and deductibles. Also search the site for “What are my health insurance choices?” for information on different types of plans.
Stick with a large provider. Many health insurance experts advise choosing large, well-known insurers. They’re more likely to have staff who handle grievances, and a toll-free number for questions. Ask for a booklet detailing all you need to do to be covered or reimbursed.
The Health Consumer Alliance (healthconsumer.org or [800] 896-3203) can offer referrals to healthcare options in your area or help going over the fine print on a policy.
General information is also available from the California HealthCare Foundation ( www.chcf.org) or the aforementioned HealthCareCoach.com.
And, if you’re a woman, be sure to check for maternity coverage. Many inexpensive plans -- including Tonik, a plan for young adults from Anthem Blue Cross (available in California) -- don’t include maternity coverage. So, you may want to consider a rider. Depending on income, pregnant women may qualify for care, for themselves and their unborn baby, under Medi-Cal, California’s Medicaid program. Find out more at www.medi-cal.ca.gov. That coverage could continue for both, and possibly for a partner if he’s part of the household after the baby is born.
Don’t automatically choose only catastrophic care. It’s a myth that young adults rarely need a doctor, says Stoll. Accidents happen, and physicians are finding diabetes and early heart disease in many younger patients. A regular checkup is a necessity if you have certain conditions such as epilepsy or diabetes, and women should see their gynecologist once a year. You could opt for a low-cost plan that covers you only in an emergency, if that is all you can afford, says Stoll of Families USA. In that case, however, couple that with visits to community health clinics, especially if you’re not feeling well. Visits may be free, or assessed based on your income. Find a clinic at findahealthcenter .hrsa.gov.
Figure in all costs. Premiums can be the highest cost, but they’re not the only one, says Randy Boyle, a senior attorney with the National Health Law Program in Los Angeles.
Take into account the deductible, co-pays for drugs and appointments with doctors, potential emergency-room visits and hospital stays, and any other costs that the insurance doesn’t include.
If you see a doctor regularly for acne, for example, says Boyle, and use a drug every day that isn’t a generic, you need to factor in those costs to see what you will pay out of pocket. A $30 co-pay and no coverage for, say, a $100-a-month drug, would add $1,560 to your annual cost, so you might be better off with a plan that has a lower doctor co-pay and covers a drug you take.
Be wary of short-term plans. These plans, which typically run in six-month increments, can be less expensive than year-long ones and may be tempting if you think you’re weeks to months away from a job with employer-sponsored health benefits. The plans are offered by many large insurers and are sold by brokers and online retailers such as Insure.com. But at the end of the short-term period, the insurer has no obligation to renew your coverage -- and probably will not if you became ill while covered by a short-term plan. And at that point, you may not be able to buy any other coverage, either. Stoll advises steering clear of short-term plans. Sign up for an annual plan, and you still have the option of canceling every 30 days.
If possible, continue university coverage. Some colleges may extend coverage even if you don’t remain in school, for rates possibly lower than you’d find on the open market.
Check the university’s health center for more information. UCLA, for example, offers a time-limited policy for graduating students, though it’s not an extension of the insurance they have as students. Called the short-term SHIP “Gap” plan, it’s available for six months to any graduating student currently enrolled in the student health insurance plan.
But be prepared for sticker shock -- while the annual undergraduate premium at UCLA averages about $800, for someone graduating in May or June of this year, the gap policy would cost $272.66 per month for a student 24 or younger. (Be sure to compare such offerings with individual plans, and also compare the specifics, such as drug co-pays and maternity coverage.) The rates go up for older students. For example, the cost is $469.20 per month for graduating students ages 25 to 30.
An upside of continuing university coverage is that you can keep health insurance while you search for a possibly more affordable plan.
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