With a degree in hand and a sense of independence, graduating college students are now prepared to begin their lives in the job market, hopefully with most considerations already figured out. If you’re one of the fortunate ones, you already have a job lined up and even have a place to live apart from mom and dad. As a single person there are fewer obligations to contend with. There is one area that needs to be addressed, though many graduates may feel it is not worth their consideration at this time – health insurance coverage.
“What, me?” you may ask. “I’m young and healthy and insurance coverage is the least of my worries.” With the prospect that you have a looming student loan to pay off, the added expense of health care coverage seems more a hindrance than a necessity. This perspective carries a lot of weight and becomes irrelevant if you do obtain a job with an employer that provides health care coverage. But for those less fortunate who find themselves still in the hunt for a job during these tight economic times, here’s what’s available to you in reasonable health insurance coverage.
Let’s get the bad news out of the way first. By 2014 you will be faced with the need to provide your own health care coverage or the federal government will penalize you with a tax penalty close to what you would nominally pay for coverage. Though this seems unfair, it does motivate you to get coverage that you will need some day and by creating a larger pool of insured policy holders from healthy young adults who don’t currently have it, overall rates will go down. If you remain unemployed by 2014 and are still not covered, you have three options.
1. Remain uninsured and incur the tax penalty that when fully phased in by 2016 can take up to 2.5% out of your wages, with a maximum of $2085.
2. Move back in with the parents and have them put you back on their insurance. The new law will now allow dependent children to be covered until they turn 26. This assumes however that you remain unemployed until then and that mom and dad are willing to give you back your old room they’ve already turned into their private gym.
3. Buy your own insurance. As a young healthy adult your rates are not going to be as a high as someone who is older with health issues. Though the new reform prevents insurance companies from excluding kids with pre-existing conditions now, as an adult you will not be immune from this practice until 2014. Also by 2014 there should be in place state “exchanges” where companies are pooled to provide a variety of policy options for you and hopefully at competitive prices. For those states that refuse to create such exchanges, the federal government will make one available for such people.
Your ability to pay for this mandated insurance will be based on your income. Most students are fortunate to find employment that provides health care insurance but if you don’t and your wages are not substantial at first, the federal government does provide assistance for people who would struggle with this added expense. And contrary to the outrage you may hear from some, Uncle Sam will not hunt you down if you refuse to purchase health care insurance. They simply deduct your wages when you do become employed for the fee mentioned above.
The economy is beginning to show signs of life so if your job prospects have been weak up until now, the future is beginning to look somewhat better. There are short term arrangements you can make to access health insurance coverage until that job opportunity comes along. There are on insurance brokers like eHealthInsurance.com who can find you policies for a short period, anywhere between six and 12 months with relatively low premiums but come with minimum coverage and very high deductibles. Stephen Rosen with the Kansas City Star found that a 22-year old male non-smoker could pay roughly $110 a month for a policy with a $2500 deductible and a prescription drug benefit and dental coverage. If that seems steep, compare that to a 60 year old male non-smoker who would be lucky to find a similar policy for $650.00 a month
Overall the new health care reform legislation will make insurance choices more available and more affordable for graduate students and others who find themselves uninsured. Once these health exchanges are up and running later this year, but no later than 2014, the federal government will provide a website that will “will provide consumer assistance offices with trained experts to help you ‘navigate’ the health care choices and help you enroll in the plan you choose.” (whitehouse.gov – Putting Americans In Control of Their Health Care)
It is not until we really find ourselves faced with unexpected and very costly health care costs that the need for health insurance coverage is fully appreciated. Young healthy people like college students, often referred to as “Young Invincibles”, are the ones most likely to realize such a need because as a group they are least likely to have any on-going history with poor health. Yet it is this age group more than any other that takes physical risk with lifestyles that push safety to the limit, be it in their work or leisure activities.
The advantages that college graduates now have today that we haven’t had in past generations is not only that health insurance will be more available to them at competitive rates but they will likely find employment with smaller businesses who can now better afford to provide health care insurance for their employees. They will also be able to obtain policies that do not discriminate against any pre-existing conditions they may have had, refuse to cover any necessary physician requested procedure or limit the annual and life time coverage in the event that health care costs become the result of some catastrophic condition they find themselves faced with.
Putting Americans In Control of Their Health Care
What Health Care Reform Means for: “Young Invincibles”