Although finding a job may be the top priority for most new college graduates, parents are often more concerned about continuing their children’s health coverage. Insurers typically drop kids from their parents’ health plan once they grab that diploma (or by the time they turn 25).
Sandy D’Annunzio, a nurse in Sterling Heights, Mich., bought short-term health-insurance policies from Golden Rule for her two daughters, Jennifer and Kelly. D’Annunzio pays about $57 a month for each policy, both of which have a $1,000 deductible and 20% co-insurance (meaning the insurer picks up 80% of a claim after the deductible is met). “If one of them broke a leg, it could cost 70 times as much,” says D’Annunzio.
Most short-term policies last six months to a year, after which you may reapply, as long as you remain healthy. But they don’t typically cover preventive care or preexisting conditions, so they’re really just a temporary fix.
For longer coverage, consider an individual policy with a high deductible. For a policy with a $1,500 deductible and 20% co-insurance, a young female nonsmoker would pay $124 per month in Chicago. That’s more expensive than short-term insurance, but it covers many of the medical expenses that short-term policies exclude.
If graduation is still a few months away, buying student health insurance may be a cheaper way to go. But don’t delay. Assurant Health, a major provider of such plans, requires that coverage begin at least 31 days before a student graduates.
Like short-term health insurance, student health coverage has a long list of exclusions. But in most cases, it is less expensive than a short-term policy and is renewable. For example, a 22-year-old female nonsmoker in Chicago would pay $66 a month for a student health policy with a $1,000 deductible and 20% co-insurance through eHealthInsurance.com. A similar short-term policy would cost $104 a month.
If your child has a medical condition, such as asthma or depression, buying individual health insurance can be tough. In that case, take advantage of COBRA; the law allows your adult child to remain on your policy for up to 36 months. COBRA coverage isn’t cheap because you have to pay both the employer share and the employee share of your group premium, but it can serve as a safety net while you look into other options. A number of states are taking steps to extend coverage for young adults.
— Thomas M. Anderson