Friday, October 23, 2009

Health Insurance Resources for New Grads

2) Take advantage of new protections resulting from health reform -- Health reform's most dramatic provisions won't come into effect until 2014, but there are several changes scheduled for 2010 that may help new college graduates:

-- If you buy your health insurance in the non-group market, you'll enjoy
better protections against policy cancellations and dollar limits
placed on your benefits
-- If you're under age 26 you can re-enroll with a parent's health
insurance plan
-- New health insurance plans will be required to provide more robust
coverage for preventive care
-- High risk pools will be established for people with pre-existing
medical conditions who have been uninsured for six-months or more

3) Don't expect a free ride -- Despite new protections for those buying coverage on their own, you won't be able to sign up for any "public option" health care plan run by the government in 2010. That didn't make it into the final health reform bill. And if you're uninsured and incur serious medical expenses due to injury or illness, you'll still be responsible for those bills.

4) Simple math can save you big bucks -- Find out how much your parents' health insurance premiums will increase if you're added back onto their policy. Compare that with quotes from leading health insurance companies in your area to see if it makes more sense to buy coverage on your own. In many states college-age grads may be able to find individual health plans for less than $70 a month. That may be substantially less than some employer-based health insurance plans charge when an adult dependent joins or rejoins a parent's policy. Your parents may even be willing to help you fund your own coverage if it saves them money.

5) Understand how network access affects overall cost -- Adding a child back onto a parent's health insurance plan may not make sense if the child lives out of state. That's because most health insurance companies operate in a single state and don't have in-network providers outside of their coverage area. If you're seeing an in-network provider, the insurer may pay anywhere from 100% of the cost to 85-90%, depending on the coverage you have. If you go to a provider that is out of your network, your insurer may pay just 50%-70% of your costs.

6) Check into early enrollment options -- If it makes more sense for you to go back on Mom and Dad's health insurance plan, ask their insurance company or Human Resources department if you can sign on early. Technically, health reform doesn't require that they take you back until after September 23, 2010. But some insurance companies are allowing grads to enroll early to avoid going uninsured this summer.

7) Consider starting a Health Savings Account (HSA) -- Beginning in 2010, an individually purchased HSA-eligible health insurance plan will cover the cost of preventive care screenings, immunizations and women's health screenings. For a young person, an HSA may be the cheapest way to get coverage:

-- Get the lowest monthly premium available (you're young, healthy and
low-risk)
-- Never pay anything out of pocket for most preventive care (thank you,
health reform)
-- Save tax-free for retirement or an illness with an HSA account
-- In 2014, federal tax subsidies will be available to help you pay your
monthly premiums if you earn less than approximately $45,000 per year
-- If you do switch to group coverage later in life, you keep the money
in your HSA and may still spend it on qualified medical bills, or save
it for retirement

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