With the pomp and circumstance of graduation behind them, many college grads are either enjoying a well-deserved break or hitting the pavement to look for a job. But there are still plenty of valuable lessons to learn about being a grown-up – and one of them is how to buy health insurance.
Fears of lost coverage
Lara Kawa, who just earned her Bachelor of Arts degree in English from Wayne State University in Detroit, found herself getting schooled in the finer points of insurance shopping the day she graduated.
“I thought I’d be covered under my father’s plan until I turned 26, but someone who didn’t know what they were talking about said I’d lose that coverage as soon as I graduated,” says the 24-year-old Kawa.
It turns out that Kawa is covered until her 26th birthday under her dad’s retiree plan – a fact she clarified with one phone call.
“I thought it was strange I never got a letter telling me my coverage would end,” she says. “Fortunately, my boyfriend’s mother suggested I call the insurance company and it all worked out.”
But the graduate’s scare wasn’t unreasonable or unrealistic. Some students could actually lose coverage under retiree-only plans, which are not required to cover dependents up to age 26 under the Affordable Care Act.
A few important insurance lessons
During the three weeks when she thought she was losing her insurance coverage, Kawa learned a lot about her options. While she was at a job fair, she visited a booth hosted by Get Covered America. Among her discoveries:
Special enrollment periods
- Kawa found out that potentially losing her coverage was one of many reasons she might qualify for a special enrollment period outside annual open enrollment.
- Moving away from the coverage area, changing jobs and getting married are among the other life events that qualify anyone for a special enrollment period 60 days after losing coverage.
- Like Kawa, most young people can stay on their parents’ plan until they turn 26. They qualify for a special enrollment period for 60 days before and 60 days after their birthday.
Especially for young people who aren’t making much money, insurance doesn’t have to be expensive, especially with the help of tax credits – something Kawa found out for herself.
“The least expensive plan was $11 a month, but the deductible was $6,500,” she says. “There was another one I would have picked if I needed it, for about $85 a month with a $150 deductible and low co-pays. You don’t want to go with a high-deductible plan unless you have to.”
The security of coverage? Priceless.
Speaking of money, not getting covered can be expensive. First, there’s the fine for not having insurance if you can afford it, which in 2015 is $325 per adult or 2 percent of annual income, whichever is higher.
Plus, there’s the cost of getting care without insurance. Treatment in the ER for a broken arm could cost more than $8,000 – a steep price on top of the student loan debt many graduates are struggling to pay off after college.
Although she’s relieved to be covered a while longer, Kawa already feels more confident about being an insurance consumer. “When it comes to buying health insurance,” she says, “I don’t feel as in the dark as I did before.”
Graduates and students: Check out this great piece from my co-contributor Louise Norris to learn even more about shopping for and buying insurance.