Health insurance options for college grads

by Lesley Politi on June 2, 2009

Health insurance options for college grads

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Tips for helping find the right plan for your college graduate. There are many low cost short term plans as well until you hopfully find a career with health insurance.

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Your son or daughter has just graduated from college and is looking for a job. What health insurance options do they have?I asked several experts to help me understand the range of choices and what they might cost.

The good news is that under a new law that went into effect on Monday, parents in Illinois can keep children on their insurance policies up to age 26.  The bad news is that young adults with chronic medical conditions may find it hard to secure coverage on their own.

Last year, the Commonwealth Fund, a health care foundation, reported that about one-third of young adults become uninsured for some period of time in the year after they graduate from college.

Should something happen—a car accident, say, or a sports injury—these young people could face significant medical bills while they’re trying to pay off college loans.

That’s why health care experts recommend that young adults purchase some kind of coverage. Options include:

Dependent coverage on a family plan: If you have health insurance through an Illinois workplace, you can keep your college graduate on that plan up to age 26, or to age 30 if the young person has served in the military. You’ll have to pay the full cost of the premium for the graduate.

Excluded are companies or union plans that are self-insured like Motorola or the Chicago Tribune.  You may not know the status of your company’s health plan;  be sure to ask your benefits department. Many companies that are self-insured hire insurance companies to manage their health plans.  (The difference is, the company remains responsible for the cost of care, not the insurer.)  The loophole exists because states can’t regulate self-insured companies.

This new Illinois law went into effect on Monday. But people become eligible whenever their insurance policies next come up for renewal.  For many people, that may be Jan. 1, creating a gap in coverage.

For my previous posts on the new law, click here and here.

Short-term insurance. Several companies offer insurance policies lasting from one to six months. Blue Cross and Blue Shield of Illinois provides coverage for as little as $50 to $60 a month for a policy with a $1,000 deductible (the amount you pay before insurance kicks in).

Short-term policies can be a useful way of bridging a temporary gap between college and a job or graduate school. But many contain limits on hospital and doctor visits, so “you really need to read the fine print to understand what is covered,” said Sandy Praeger, Kansas insurance commissioner and chairwoman of the health insurance committee for the National Association of Insurance Commissioners.
 
Also, there is no guarantee that you can renew a short-term health policy if your health status changes. Blue Cross and Blue Shield of Illinois won’t cover pre-existing conditions under its policies. Young adults with major illnesses— for instance, heart disease or diabetes—won’t qualify.

Individual insurance. Healthy young people can find many options in the individual insurance market. But if they have a record of medical problems, coverage can be hard to get.

David Ploss of Antioch was turned down at age 19 after leaving college because he’s deaf in one ear, has had many surgeries to correct the problem, and has skeletal issues associated with his 7-foot height. “I cannot believe how complicated it is to try to find him coverage,” his mother, Darlene Ploss, said.

For a Blue Cross and Blue Shield of Illinois plan with a limited provider network and a $1,000 deductible, a young adult might pay $70 to $200 a month, said Katherine Wright, divisional vice president of consumer markets.

You can lower premium costs by increasing the size of the plan’s deductible, but it’s important to figure out if you can pay for medical expenses before coverage kicks in, said Michael McRaith, director of the Illinois Division of Insurance.

Discount plans. These are not insurance plans. All they promise members are discounted rates from doctors and hospitals. “Make sure you get a list of the providers that have agreed to participate,” Praeger said. “And understand exactly what the discounts are.”

Employer-based coverage. The ideal for a newly minted graduate is to get a full-time job with health insurance.

Unfortunately, only 20 percent of college graduates looking for a job had succeeded, according to a survey conducted from mid-February to the end of April by the National Association of Colleges and Employers.

ICHIP. The Illinois Comprehensive Health Insurance Plan is an insurer of last resort for people with illnesses that make it impossible to get coverage elsewhere. If your graduate has a serious existing illness, this may be an option, but it tends to be quite expensive.

Cobra. Before Illinois’ new law, young adults were frequently terminated from their parents’ insurance policies when they graduated from college. Cobra coverage can start at this point, allowing a young man or woman to extend employer-based insurance for another 18 months. The new Illinois law lasts longer and appears to be a better deal.

 

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Anthem Blue Cross has some wonderful plans for young adults just getting off their parents health insurance. They have very low out of pocket max, which is the most important part of your medical insurance plan.

Please call with any questions, 818-709-8442

www.health-insurancalifornia.com

Source: http://newsblogs.chicagotribune.com/triage/2009/06/health-insurance-options-for-college-grads.html

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