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Health insurance on the cheap

Marketplace Staff Jun 30, 2006


TESS VIGELAND: New college grads have a few things on their minds: where they’re going to work, what kind of career they can wring out of dual major in philosophy and dramaturgy, little tuff like that. They’re probably not thinking about what’d happen if they got sick or injured, because they’re young, invincible right? Wrong. Getting health coverage is important at any age. The problem is grads are generally at the age where they can’t afford it. Or can they? Karen Pollitz is the project director at the Health Policy Institute at Georgetown University. Karen, let’s say you just graduated. You’re still looking for a job. Can you stay on your parent’s insurance or once you’re out of the house you’re out of luck?

KAREN POLLITZ: No it absolutely is possible and that’s an important thing to look at. A lot of young adults won’t have a job with benefits that they can sign up for in their own right. Most people will have the opportunity to remain on their parent’s policy under COBRA, which is a federal law that lets you continue on your parent’s policy even after you don’t qualify as a dependent. You’ll have to check with your parent’s policy to find out what their rules are, but typically you’re no longer a dependent at age 19. Or if you go to college full time you may get to stay covered as a dependent until you’re 22 or 23.

VIGELAND: But you are still having to pay a premium and a deductible. It’s not like you just still get free healthcare under your folks.

POLLITZ: Right. Right. So once you are eligible for COBRA your folks’ employer is going to stop paying part of the premium.

VIGELAND: For you?

POLLITZ: For you. So you can still stay in that policy but you need to pay the whole freight. And, you know, different policies cost different amounts but it’s not at all unusual to be looking at premiums of $300 a month or more for COBRA coverage.

VIGELAND: Yeah, and that can be pretty expensive when you’re young.

POLLITZ: That can be very expensive when you’re young. On the other hand, staying in your folks’ employer plan may be a very good idea especially if it’s only a couple of months. So if you can swing it at all or if your folks could help you with the premium chances are the coverage will be pretty good.

VIGELAND: If that’s not an option would you perhaps want to consider some short term coverage?

POLLITZ: You can, and that’s for sale. Here’s the trick about short-term policies, and they’re for sale a lot and they tend to be even cheaper: Short-term policies by definition only cover you for a short period of time and they’re not renewable at your option. If you are pretty sure, darn sure, that you’ve got health insurance that’s going to start in six months, for example, you might want to consider buying a six-month nonrenewable policy. But if you get sick or injured while you’re covered by that nonrenewable policy they will not renew you. And the second it expires they will stop paying your claims and if your illness or injury means you can no longer attach to that next coverage that you thought was coming like maybe you’re too sick to work now, you’re in trouble.

VIGELAND: Just stay in the house and stay on the couch.

POLLITZ: Well, I hate to sound like the prophet of doom and gloom but it really, it is tough out there. It’s harder. The game is a little bit rigged against you. You really need to look at whether coverage is available to you, whether you can get it, whether you’re eligible for it, whether it’s affordable and then how adequate is that coverage? You’re safely insured when you can get all three of those A’s coverage that’s available, affordable and adequate. But you just need to know it’s not always an easy thing to do.

VIGELAND: All right. Well if you want to do that research what’s the best way to do that? You can research a car on the Web, can you research insurance?

POLLITZ: You can research insurance to some extent on the Web. When you go to insurance company Web sites or some of these you know insurance quoting Web sites, you just need to know that the information that you see up there is the best case scenario. That is the policy that’s being offered to people at that price who are in perfect health. Another good Web resource are some consumer guides that we’ve written at Georgetown and those are available at www.healthinsuranceinfo.net. We’ve written guides for each state in the US and those summarize the protections that you have when you’re trying to buy or keep health insurance in the state where you live. The rules are really different. So at healthinsuranceinfo.net, you can get a summary of the programs and rules that are out there to help you obtain good health insurance.

VIGELAND: Okay. Terrific. Some great resources and we will have a link to those sources on our Web site marketplace.org. Karen Pollitz, thank you so much for coming in.

POLLITZ: Thank you.

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