Post-Grad Health Inusrance
finding affordable, reliable coverage
by Kris Cate
After graduation this spring, many seniors will be introduced to new responsibilities in their lives. Finding jobs and purchasing a home or car may all be part of the list; however, one consideration that is often overlooked is finding health insurance.
For many students who are being insured by the CSU policy or their parents’ policies, their coverage may end at the start of the next academic year if they do not return to the university. This is why graduates need to decide whether they will get their own insurance policy, and if so, what type of coverage they need to get.
According to a 2006 survey from the National Center for Health Statistics, roughly 43.3 million Americans under the age of 65 did not have health insurance at the time of the survey.
Hartshorn Health Service insurance director Stephen Blom commented that a large part of this statistic was made up of people between the ages of 18 and 25. He added that the cost of insurance coverage, along with the confusion of what policy to get, were two major factors involved with deciding whether to get insurance.
“The cost of health care has probably doubled in the last 10 years,” Blom said. “So with that, insurance premiums rise too.”
The first question many people face then is, with the possibility of high premiums, why get health insurance? Yvonne Davis, a health broker at Health Insurance Associates in Fort Collins, explained that it’s a matter of personal responsibility. She explained how many students right out of college feel they don’t need insurance because they are generally in good health at the time.
“It’s important because no one knows what the future holds,” Davis said. “It’s a personal responsibility to protect your assets because one problem could take it all away.”
Davis illustrated her point, explaining that a typical one-week stay in the hospital could amount to $50,000.
Tim Hebert, an advisor at SAGE Benefit Advisors in Fort Collins, added that it is important to be prepared for a financially “catastrophic” event ahead of time.
“Health insurance is like a lot of things, it’s easy to get when you don’t need it, but when you do need it, it’s almost impossible to get good coverage,” he said. “It’s just a lot better to be prepared for the worst, otherwise expenses can add up really fast.”
Blom also agreed that it’s not worth taking the risk.
“In terms of risk management, it’s huge,” Blom said. “It just doesn’t make sense not to have some kind of coverage.”
Once the decision has been made to buy a health insurance plan, there are a number of factors that must be considered when choosing which plan best fits. Blom said that, in ideal circumstances, graduating students would be hired by credible companies that offers a credible health insurance program to employees. Kevin Ward, also an advisor at SAGE Benefit Advisors, said that if a policy were available through a person’s employer it would be a great option.
“If your employer offers you health insurance, take it,” Ward said. “They provide a guaranteed coverage and usually will help make it much more affordable for you.”
Ward explained that what makes employer-provided “group” policies better is that employees are automatically accepted if they choose to purchase the coverage, regardless of their health. Employers are also typically required to help pay for these premiums.
However, if health insurance is not available through a person’s employer, other options are still available. There are multiple factors that must be considered if someone chooses to purchase an individual policy. The Insurance Information Institute Web site outlined three major questions one must ask before purchasing any health insurance.
The first is that of affordability. People need to consider premium costs, as well as out of pocket expenses they will still face with each plan.
The second issue considers the services that are provided with the coverage. Davis explained that this issue should be closely examined to see whether a person’s prescriptions are covered by the policy.
“I won’t even sell someone a policy without prescription coverage,” Davis said. “For a lot of people that’s the most important part.”
The third major issue one should consider when researching insurance policies is the credibility of the provider.
Both Hebert and Davis agreed on the importance of buying insurance from a well-known company with a high consumer rating, even if it means paying a little bit more.
“The most important thing is having a reputable company that will protect you,” Davis said. “In this situation, you get what you pay for.”
Hebert said that consumer-rating company Web sites such as www.ambest.com or www.standardandpoors.com can be very useful and reliable tools when conducting research on a company.
“If you can’t find them on AM Best or Standard and Poor’s they're probably not worth it,” Herbert said. “Any educated broker could help you with that though.”
Now, with so much information and so many options and companies to consider, it’s easy to see how finding health insurance coverage can be difficult, especially to a recent college graduate without a lot of experience or knowledge on the subject. This is when using an insurance brokerage can be especially helpful.
“Our job is to find the right policies for the individual person’s needs,” Ward said. “Plus we have access to a lot more information than the general public.”
Ward offered one last piece of advice.
“It’s important to talk to someone locally you can get hold of easily,” he said. “It’s much easier to solve problems and answer questions if you’re not three states away.”
In the end, it’s up to the graduate whether or not to purchase health insurance, but as Davis said, it comes down to being responsible if something unexpected arises.
“Nobody has a crystal ball to see into the future,” Davis said. “Having any insurance is better than having nothing at all.”
So, amid all the excitement of graduating college, finding a good job and moving out into the big world, it’s important for students to remember some of the responsibilities associated with the transition that may end up protecting them a lot more down the line.