Getting Health Insurance Coverage After College

In addition to finding a job and housing college graduates who were covered by their university’s student health insurance may also need to replace that coverage. Financial planners point out that obtaining health insurance is basic to being able to budget and manage money responsibly. “Most young people think of health insurance as something that allows you to pay for treatment for an illness or accident,” says Dr. Dena Wise, Professor and Consumer Economics Specialist with UT Extension. “What they may not realize is that health insurance is a necessary financial management tool as well. Health insurance makes health care costs predictable and controllable so you can actually plan for them in your budget rather than having each medical event or issue become a financial emergency.” UT health insurance experts offer the following advice to new graduates.

For graduates who live in Tennessee, there are three basic options for health insurance after college: (1) continuing to be covered on a parent’s traditional plan, (2) purchasing a traditional plan through a private insurer, or (3) purchasing a catastrophic health plan.

Provisions of the Affordable Care Act made it possible for young people, regardless of whether they are students or living independently, to remain on their parent’s insurance policy until their 26^th birthday. Remaining on a parent’s plan is often a more economical way to maintain coverage and it’s especially helpful if the new graduate has not yet landed a job with health insurance benefits. Even if the graduate’s new job offers health insurance, they can still opt for continuing coverage under the parent’s policy. New employees should be aware, however, that if they initially decline employee coverage, they may pay a sizable penalty if they decide to enroll in employee coverage at a later time.

 If graduates have a job that offers employee health insurance coverage, it generally offers the next-best alternative to remaining on a parent’s policy. Particularly if the graduate only needs individual—rather than family—coverage, premiums may be affordable.

If an employer’s health insurance plan is not available, a graduate may be able to find private insurance through the through the Health Insurance Marketplace. Graduates whose student health plan is ending may qualify for a Special Enrollment Period to sign up for private insurance or evaluate other options.

If they’re under 30, graduates can purchase a catastrophic health plan through the Marketplace. The catastrophic plan’s high deductible makes it a good plan only for those whose health is good enough to expect they would just need basic preventive care, which is covered without the deductible applying. The low premiums make it affordable, and even though the high deductible may be a burden in the case of a serious medical issue or emergency, it protects a young person’s future earnings from very large medical costs or debt.

Contact:               Dena Wise, 865 974-8198, dkwise@utk.edu

Understanding Your New Health Insurance

After the hoopla about the implementation of the Affordable Care Act last winter, many people never want to think about health insurance again. But others who have health insurance for the first time are just learning to use their new policies and services. In case you are in the latter category, you may still be confused by the health insurance landscape, which can be very complex.

Health insurance is essentially a contract between you and an insurance company designed to protect you from health care expenses exceeding what you might be able to pay out of your pocket. In the contract, the health insurance company specifies the percentages or amounts of charges they will pay and how much will be your responsibility for different health care services.

These are some of the terms and definitions associated with health insurance:

• The amount the insurance company charges you for a policy is called the premium. The premium is determined by the level of coverage you have—generally, the more medical expenses that are covered by the insurance company, the higher the premium. (The Affordable Care Act requires that all policies now cover at least 60 percent of expenses.)
• The deductible is the amount that you must pay for expenses other than preventive services each policy year before any insurance coverage kicks in. The Affordable Care Act designates which basic preventive services are covered by your premium with no deductible. Preventive services may include annual physicals, immunizations and screenings that can keep you from getting sick.
• For every medical service not a part of your preventive care, you will be charged a co-pay (co-payment). A co-pay is a fixed fee (such as $15) that you are asked to pay, usually at the time of service. The co-pay is subtracted from the amount filed with your insurance company. The amount may vary from doctor to doctor.
• Coinsurance is the percent of the cost of covered health care services paid by consumers. The level of coverage you have determines your coinsurance. For example, your coinsurance at different levels might be 10, 20, 30 or 40 percent. Obviously, a policy with 10 percent coinsurance would have a higher premium than a policy with 40 percent coinsurance.
• The Affordable Care Act places a cap, or limit, on your out-of-pocket expenses, currently at $6,350 for one person and $12,700 for a family. If you reach that amount, then deductibles and coinsurance will no longer be charged, although you will continue to pay co-payments.
• A claim is a request for payment that a consumer or healthcare provider submits to the health insurance company for items or services rendered.  For example, once you have completed a doctor’s appointment, the doctor’s office will submit the information to your health insurance company to process (if the doctor is an out of network provider you may be responsible for submitting the paperwork to the insurance company yourself).  The health insurance company will make a determination and send payment to your healthcare provider if applicable.  The insurance company will also send a claim statement to you for your records explaining what services were covered.
• An allowed amount is the maximum amount allowed to be paid for covered health services by a health insurance company.  This may also be called “eligible expense,” “payment allowance,” or “negotiated rate.”  In most cases your doctor will accept the allowed (maximum) amount paid by the health insurance company as ‘paid in full’ and you will not be responsible for the difference.
• Balance billing is when the provider bills the consumer for the difference between the provider’s charge and the amount allowed by the health plan.  For example, if your doctor does not accept the maximum allowed then you may receive a bill from them charging you the difference between the doctor’s charge and the maximum allowed by your health insurance company.  You will then be responsible for making this payment.

You will find a more complete glossary of health insurance terms at Https://www.healthcare.gov/glossary/ . The better you understand your health insurance, the more you can benefit.

Barbara Metzger and Dena Wise