Graduation and Health Insurance

     

       Before you graduate from college or graduate school, you probably never need to care about your health insurance. Some may stay within their parents’ plans until they are 26. According to the Affordable Care Act, after reaching age 26, one needs to have their own health insurance plan. For those who are not covered by their parents’ plans, they were mostly required to enroll in the plan offered by their school. In such cases, there is not much you need to do. If you really care, the only thing you can do is reading the health insurance brochure, finding out what is the copay for different types of visit. Of course some people do have the option to take the plan offered by their school or opt out.

Each academic year the insurance premium is included in the tuition and fees. You just pay it and forget about it. Most student health insurance plan provided by the university are pretty good. The copay is low. Besides, most of the time, whenever you have a medical issue, you go to your university physicians and they can resolve most issues right there, and in such cases the copay is lower or even zero. When I was in graduate school, my university health center designated a small team of physicians to each student. So each student would keep seeing the same physicians throughout the years. Rarely when one needed special care, the university physician will refer the student to see a physician outside.

The situation would be very different once you graduate and start a job. You need to choose your health plan from various options. It is important to figure out how healthy you are, how much health care you may need in the coming year. This would require some calculation done at home. In general, higher monthly premium means lower copay and less total cost, and vice versa. If you are in good health, and will not need to see doctors that often, you may want to get a lower monthly premium so to save money.

But I do not recommend to be too stingy on health care. We all know how expensive health care is in this country. An ER visit can easily cost around $10,000. Without a proper coverage, one can in deep financial trouble. That is why one should pay attention to another factor in choosing health insurance plans, the annual limit. That is, in the worst case, you much you are required to pay out-of-pocket before insurance kicks in. For example, plan A’s annual limit may be $5000 for one person, plan B’s annual limit is $7000 for one person. Let’s say, one developed a health problem that cost $8000 to fix. With plan A, one only needs to pay $5000 out-of-pocket, the rest $3000 will be paid by insurance. With plan B, one needs to pay $7000, insurance will pay $1000.

Many of us will be overwhelmed by the benefit package we are offered by our new employers and the work need to be done in order to make the right choices. Some may never heard of some of the benefit items. For example, my European colleagues have said that they never knew they need retirement plan. They felt strange and angry that they have to put part of their monthly salaries to a retirement plan. The point is, these are new things one needs to figure out. It does not matter if you know it or not, it is your task to make decisions for you. If you screw up, it is your money.

If you read this article or similar ones, I am sure you will be better prepared once you graduate and start your new life.