A few weeks ago, my personal finance class discussed health insurance. The vast majority of my classmates are seniors, so most of us are looking down the barrel of graduation. But I’m in a particularly sticky spot – I’m actually graduating in three weeks, not in May.
All of the talk of health insurance made me very, very uncomfortable. As I sat there listening, questions raced through my head: "When does my current coverage end? Is it the minute I’m no longer enrolled in classes? Do I have until graduation day, because that’s in May, and that would be better. Or do I have a grace period, like three months past graduation? If it is expiring in just a few weeks, can I pay to keep it? How much would that cost? Can I pay the same company just a little bit and get major medical insurance, or will I have to to shop around to find something I can afford?"
The College-to-Life Transition
Most college students have health insurance, simply because the university requires it – either through our parents, or we have to buy a policy that the school offers. I happen to be covered under my father’s health insurance that he has a part of his pension plan (he’s retired). But many of us decide to forgo our own health insurance after graduation… for whatever reason. If it isn’t provided by an employer, we may not be able to afford it on our own. Or we may not think we need it, because we’re healthy, right?
Ok, let me make this real simple for you: healthy people can easily get hit by a bus. Or trip over something. Or catch an STD. You are not immune, so stop thinking that you are. You need health insurance, even if it’s just "major medical," which will cover the big stuff if something bad happens. I treat health insurance like food and shelter: it’s a need.
Why’s it a need? Because in 2007, 2.2 million Americans filed for bankruptcy because of medical bills that they couldn’t pay. That’s not how I want to start out my life. Or something I want in the middle of my life. Or at the end, either. Never is a pretty good time for that to happen to me, how about you?
Making the Phone Call
Friday evening, I finally got around to calling the number on the back of my health insurance card. It was 8:00 PM, so I didn’t think anyone would answer, but that I would get a machine telling me what time I could call back. But a real, live, helpful guy answered the phone and asked me for my information. Once he was logged into my account… I asked him the $64,000 question: "When does my coverage end?"
My story comes with a happy ending. The customer service rep said, "Well, let me see…. Wow! You have a really good plan! Now, this might change next year, but what I see here is that you’re covered until you’re 26."
"26? I don’t… have to be in school or anything?"
"Nope. Until your 26th birthday. You don’t have to do anything but… be alive, and you’re covered."
This is extremely good news for me. I can take internships and part-time jobs with no benefits. I can start my own businesses and, at least for the next 3-and-a-half years, not worry about purchasing a health insurance policy. I get to keep my current coverage and just… keep on ticking!
But you saw the caveat and well as I heard it on the phone: "This might change next year." I’m going to have to call in and check on this, often. At least every six months, I’m going to call that number again, and ask them when my coverage ends. But I’m covered for now, and for longer than I thought I would be!
Even if you are willing to risk that you won’t get hit by a bus, you still should never have a gap in your health insurance. If you do, the new insurance company can say you have a preexisting condition and charge you tons more for something that would normally be covered.
That’s nice! My mum’s insurance only covered my until I was 22 and then I had to get my own coverage until I got my full time post-graduation job.
I used to work for a company that managed the health benefits for other companies and as a result, I know a great deal about health plans that most people don’t. I was going to post a comment offering advice on the subject, but it became such a long post (almost 2 pages)that I decided just to put it on my blog and link it. I hope the information helps!
http://ramenlife.blogspot.com/2009/02/health-insurance-for-dummies.html
Nice blog.
My granddaughter graduated last June and is fortunate enough to have a job with insurance although she doesn’t know for how long.
It’s smart to get a handle on your finances when you’re young. You certainly can’t rely on a man like many in my generation did.
Lyn Harris
Going without insurance is one of my biggest fears. That’s the only reason I work so many hours to qualify for the full time benefits such as insurance. How horrible to lose everything due to one illness or injury. Even with insurance any kind of emergency room visit or hospital bill can wipe out a savings account. But better that than have to foreclose on a house and have paychecks garnished for an outstanding bill.
hustler – I would never recommend foreclosing to pay a hospital and they don’t garnish your wages for medical bills. Hospitals mostly work out a payment plan, and if you can’t afford to keep up with the payments, they usually write it off or it goes to collections.
If you can avoid it, never go to an emergency room. You should only go to the emergency room if your immobile, unconcious (in which case you wouldn’t have a choice), bleeding, or have broken bones. They charge you an arm and leg for emergency care. I have a friend who wasted four hours waiting in the ER for an anxiety attack, and she was breathing perfectly fine.
Take advantage of your local free clinic, if you have one. If not, make an appointment with an (in-network) doctor. I keep a list of in-network doctors on my fridge. Everyone should. If you don’t have insurance, go to a regular clinic. They may not be free, but they charge a lot less than the hospitals and you can walk in without making an appointment.
I recently saw one in a Wal-Mart that puts the prices for care up where you can read them without even going in. I like this policy and I think hospitals should adopt it. Maybe then people would see what it costs to be paranoid or impatient for tiny issues that could have waited for normal doctor’s office hours.
I’m going to stop here before this turns into another two pager. XD
I recently saw one in a Wal-Mart that puts the prices for care up where you can read them without even going in
Oh, man, I think every medical place should do that. Especially dentists since they charge non-insured people so so so much more than they charge people with insurance. That way, everybody would be forced to be honest since the prices are right up there.
Maveth,
Oh yes. Unfortunately, the hospital that my husband owed turned the bill over to a collection agency. That agency took him to court and won. Now his checks are being garnished until it is paid.
That’s different. Collections agencies are notorious for that. Hospitals themselves can’t garnish wages.
I found a great article on dealing with collections:
http://www.brokeass-student.com/how-to-fight-back-against-collection-agencies/
I’m glad that we don’t have this problem here in Canada….everyone is covered 100%!
Mike – we are not covered 100%, that’s why we still have health insurance in Canada. Actually, I doubt you are Canadian because we know exactly what our own province covers and what it doesn’t.
We are lucky in that we will never have a life-or-death situation decided by money. We can get a fair amount of preventative care. As well, our hospitals are very conscientious to not provide services you do not have coverage for without asking, as all the necessities are covered. However, some health professionals, recouperative care, prescriptions (outside a hospital) and many other things are expected to be covered by private insurance.
I am thankful that when I was runover by a car, I could go to the ER without thinking. I was incredibly grateful to discover I only had soft tissues damage, which hurts but heals. Then, despite that I couldn’t walk due to the pain in my foot that was actually trapped under the tire, OHIP (provincial insurance) did not deem crutches necessary without a broken bone so, if I wanted them, I had to pay $150 (in 2001). I didn’t have that kind of money, so I asked if we could take the wheelchair into the parking lot. I had someone help me into a car and called Neighbourhood Services when I got home ($10 for crutches).
Not to mention that taxes are not the only way people pay for provincial health care: some provinces charge premiums which are deducted off of the paycheques of the working. It may be worth it but I can put a dollar amount to every social service I take part in by looking at past paycheques (ever looked at your CPP/QPP contributions?).
We get great benefits because we pay for them. The only difference is that during times I am unemployed, I only get reduced services while someone else pays for me. Then, when I get a new job, I’m helping carry someone else. Why? Because we happen to believe that healthy people contribute more to the state (which is why they could sell universal healthcare to the government and public) and, through laws, have banded together to provide. However, even as a collective, we only provide so much…
… and you learn very quickly what is not provided when you cannot afford the extra.
It should be noted that some of those people who filed bankruptcy due to medical bills had insurance, too. Insurance is great, but it’s not designed to pay every last penny if you have something major.
After college, I went without health insurance for 3 months. Even though I got a job right away, there was a 3 month probationary period before it started. But it was health only, not dental. I didn’t get dental until I got married and was added to Hubby’s health plan. So now I’m double covered on the health and have dental – all employer funded.
That’s good news, Stephanie. As I recall, I had to get Blue Cross within a few months of getting out of school. Luckily, I managed to have a pretty low monthly bill, but it was nice to get it covered by my employer when I got my first fulltime job. (Not so nice when I lost it when I got downsized, but alas, such is life.)
Insurance coverage rules are changing rapidly in this financial climate, so the advice to check it regularly is particularly sound right now! I’m glad that you have such excellent coverage, and hope that it continues to lead you to have great coverage as long as possible.
Jerry
Interesting comments. An additional thougt-Be wary of “discount plans.” College students are frequent targets.
Ed
thanks for using my picture!
Thanks for taking the picture and licensing it for commercial use via the Creative Commons license! 🙂
Is the crediting in the post adequate for you? My system has been to credit the name of the photo (sometime truncated if the photographer gave it a long name) and the username of the photographer in the “title” and “alt” tags on the photo, so that you will see it when you mouse over the photo, and to also hyperlink the photo to the Flickr page of the photo so that people can see more from the photographer. This has led to some confusion in the past about whether I credited the photographers or not, so I just wanted to get your opinion on it!
Again, thanks for what you do!
You are very right, it’s easy to think that you’re invincible when you’re young and that’s just not the case. I broke my hand a few months ago, and since my insurance was crap at the time, I decided not to go have it looked at, thinking “ahhh…it’s okay.” Not the case. Luckily I got it looked at before it needed to be rebroke. Needless to say, I have since spent more.
I never know what is better: being able to take things like your health for granted or having gone through a position where you cannot afford it and appreciate it later.
Two weeks ago, I was just hired for a part-time job and had to get my teaching supplies out of my storage room. The boxes weren’t that heavy but falling on your back… I hurt my back and, living in Ontario, I could go to the doctor. However, being unemployed and uninsured (beyond coverage from the state), I couldn’t afford either a prescription or the physiotherapy they suggested. Most days, it’s a dull ache but some days I’ll just move the wrong way and I’m crippled in pain.
I worry that I may not be able to do my part-time job now, because you use your back teaching CPR. I also worry that once I finally get medical insurance, it won’t be covered because it occured while I was uninsured (Canadian insurance works differently than American, so pre-existing conditions are always a factor, but…)
Still, once I am back to full-time and have insurance again, I hope every time I pay I remember how much right now sucks: being in pain, often preventing me from performing certain tasks and having no recourse. I certainly didn’t appreciate the freedom enough when I had it.
“That’s nice! My mum’s insurance only covered my until I was 22 and then I had to get my own coverage until I got my full time post-graduation job.” the same me, except that until I was 21.
nice post! i agree that insurance is the most important things for us. We’ll never know what will happened and health insurance is important! =)
Great post!
If I may say so, you’ve got a good thing going on with your decision to always be on your toes in checking things with your health insurance. Not everyone as young as you (who is insured) would go an extra mile to check on that vital info. Perhaps, they just have a lot of other things in mind. Then again, if you choose to keep yourself informed of the important factors, like your length of coverage, lesser worries would come your way.
These things actually change without prior notice. So, your decision to check back often from time to time is a good decision that everyone else should emulate.
You should at least get a catastrophic health insurance plan to cover yourself.
I would agree, a comprehensive major medical plan is a must. This was a great post that should be in front of many college students.
While you can maintain your coverage under your parents plan until age 26, under the changes made thus far in health care reform, you may save both your self and your parents some money by getting your own plan. A person in their 20’s in good health can get very good individual coverage in the low $100’s, and a family plan may have you marked higher, especially if its been in force a while. If you are on your parents employer sponsored group plan, and their outlay is less than $150 or so, you may be in good shape. Otherwise, more investigation is required!!!
Kenneth Ford
Kenneth – those are really good points, especially for anyone reading this who’s parents are still working and paying for their health insurance plan. In my case, however, my dad is retired and no longer has to pay for his health insurance plan. My coverage is paid for as a part of his pension plan. But definitely good things to consider if your parents are paying to keep you on their plan! (In other words, don’t just assume it’s cheaper – find out!)
Thanks much for this. The recent reforms are a big deal for many, but the cost of health care is still far too high. I found a site which exposes some of the CEO pay and the bad practices: http://costofhealthcare.org
If you’re like me you’ll be amazed (and disgusted) by the insane pay these guys get while, pardon my language, shafting their customers.
Make sure the health insurance you have caps your out of pocket expenses in the event of a major illness. For example, if you have a $100k hospital bill, you want to make sure your expenses don’t exceed the OOP limit such as $2500, $5k, $10k, etc.
How horrible to lose everything due to one illness or injury. Even with insurance any kind of emergency room visit or hospital bill can wipe out a savings account. It’s smart to get a handle on your finances when you’re young.