Graduation can leave some students scrambling to find medical coverage

The Washington Post

In coming weeks, thousands of young Americans will stride proudly across the stage at college graduation ceremonies.

When they step down to the outstretched arms of their family members and friends, most will have something they did not have before: a college degree.

And most will not have something they did have before: health insurance.

The prevailing way that most people in this country obtain health insurance is through their employers. And families, usually including college students up to a certain age, get included in the package.

But when a young person ceases to be a full-time student, most parental policies cease to cover them.

This leaves them and their families in what for many is unfamiliar territory — looking for individual coverage.

Most young people are healthy, of course, so few give much thought to the consequences of going uninsured. And in most cases, those who take this risk get away with it.

But it’s not a good gamble to take, most experts say. A fall from a bicycle or a serious illness can easily produce medical bills capable of wiping out the savings of a new graduate or his family — assuming they have any savings after paying for college.

So, what to do?

The best solution, said Tom Wildsmith, policy research actuary at the Health Insurance Association of America, a Washington-based trade group, "is to find that good job that offers health insurance."

"The second-best way is to marry someone who has that good job," he added. He said it with a laugh but added that insurance through a spouse is no joke — millions of Americans get their coverage that way.

But getting a good job isn’t as easy as it was a year or two ago. And in any case, many new graduates want to take some time off for travel or other adventures. In such cases, the grad must turn to the individual market for coverage.

There are two basic kinds of policies in this market: short-term policies and standard individual policies.

Short-term policies are just that. They cover you for a short period — weeks or months — and coverage ends when the time is up. There is no right of renewal. If you still need coverage, you have to reapply and get another policy. If something happened to you during the previous policy and you still need care as a result, that probably will be deemed a pre-existing condition and will not be covered by the new policy.

These policies are relatively inexpensive but often carry high deductibles and co-payments. That means you could have a lot of out-of-pocket expenses if you get sick, but if you really don’t expect to have a claim and are looking only to prevent catastrophic expenses in the event of something unforeseen, they may be suitable.

Wildsmith said short-term policies are best for people who know they are going to be getting other coverage in the near future. This includes graduates who have a job lined up for late summer or early fall.

It also includes those who are getting married in a few weeks or months to someone who has coverage through an employer. Similarly, an early retiree with a few months to go before becoming eligible for Medicare might find a short-term policy appropriate.

Those who don’t have something lined up, though, probably ought to look for a regular individual policy. These are generally much more expensive, but you can typically renew your policy when it expires — a key benefit if you are badly injured or come down with a long-term illness.

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