Health Insurance 101
A Cheat Sheet for College Graduates and Their Parents
- Tips:
- Understand the value. Having health insurance not only helps keep you healthy but also protects you financially.
- Know your options, and plan ahead. Know what to expect after you graduate. Are you eligible to stay under your parents' plan until you have a full-time job? Can you extend your university coverage?
- Ask about health benefits. When you're interviewing, make sure to ask about the level of coverage offered. Benefits can mean big bucks added to your overall salary package.
- Mind the gap. Pay attention to when your coverage kicks in at a new job. Some employers have a delay, and you don't want to be caught uninsured.
- Use your insurance. Even though you're young and hopefully healthy, it's important to take care of yourself. Many plans offer coverage for annual preventive visits like physicals and well woman visits — use them.
- Get savvy. Take advantage of easy to use online resources like your health benefits plan website.
Related Content
- Healthfinder®:
- healthfinder
- FirstGov.gov for Citizens, Health Section:
- FirstGov.gov Health
- America's Health Insurance Plans:
- America's Health Insurance Plans
- Agency for Healthcare Research and Quality (AHRQ), Choosing and Using a Health Plan:
- Choosing and Using a Health Plan
- U.S. Department of Labor, Consumer Health Plan Information:
- Consumer Health Plan Information
- Aetna InteliHealth®:
- Aetna InteliHealth
College graduation — that annual ritual that ushers students toward adulthood and the real world. But with the real world comes responsibility — jobs, taxes, bills...and health insurance. Yes, health insurance. It's a critical yet often overlooked safeguard that can easily fall to the bottom of a new grad's "to-do" list, especially since most are in the prime of their health.
We asked the experts at Aetna for some straight answers on common health insurance questions. Here you'll find the basics and some tips to help smooth the transition.
Do I need health insurance?
Absolutely. Take a spill while jogging? Need an antibiotic? Health insurance dramatically cuts your out-of-pocket medical costs. Plus, many plans cover preventive doctors visits, helping you stay healthy throughout the year.
But aren't I still covered under my parents' plan?
It depends. Typically, you're only covered until age 23 and only if
you're still a full-time student. All other college grads can typically
be covered under the government's COBRA plan for up to 36 months — very important if you have a waiting period before your coverage kicks in at a new job.
So...how do I get health insurance?
Typically, employers offer a health insurance plan as part of a benefits
package. It's very important that you ask about benefits before you
accept the job. In fact, benefits account for about 30 percent of an employer's cost for employee compensation. Wages and salaries are only about 70 percent. In some cases, you may get to choose between
different types of plans. Determine what's best for your medical needs
and your wallet. If your employer doesn't offer health insurance, you
should consider purchasing an individual plan. In many states, the
Department of Insurance website will provide you with information about
individual plan options.
What exactly does health insurance cover?
It really depends on the type of plan you choose. Things to keep in mind include whether or not the plan covers preventive
visits (like annual physicals and well woman visits) and options like
vision benefits, dental coverage and prescription plans.
What is the difference between an HMO and a PPO?
HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations), both health benefits plans, are very popular health benefit options.
Except in an emergency, an HMO generally provides benefits only for services received from participating doctors and hospitals. In most HMO plans you select a primary care physician who can give you a written or electronic referral for specialists (dermatologists, etc.) in the network. Doctors or hospitals out of network are generally not covered.
A PPO also gives you access to a network of participating doctors and hospitals (typically with no referrals needed). If you seek care through one of these network providers it will cost you less out-of-pocket. Or, you can choose to go to non-participating doctors and hospitals and pay a higher percentage of the cost of your care.
What are consumer-directed health plans?
Consumer-directed plans often include a high-deductible health plan connected to a health fund or account. The account can be used to offset some or all of the cost of your deductible by paying for covered medical expenses
like doctors visits, allergy medication or eyeglasses. Depending on the
type of fund or account, leftover money may be saved and used to cover
medical expenses down the road.
How can parents help?
Stress the
importance of health insurance — and the implications and risks of
going without. Talk about the costs associated with health insurance
and how a small monthly payment will protect against the charges for an
unexpected hospital visit or illness.
Lastly, make sure your new grad has a good understanding of the basics. Explain from your own experience how insurance works and the range of options available.
