Just Got a Diploma? Here's What You Need to Know About Health Insurance

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The number of uninsured young adults continues to increase: The rates of high school graduates completely lacking health insurance now stands at 38%, meanwhile 34% of college graduates also lack coverage.

Young adults are often bumped off of their parent's insurance, whether it’s on their high school or college graduation day. Even if they’re able to secure a job with benefits, those often don’t kick in until several weeks, or even months, into employment. The result is a lapse in coverage that can create financial havoc on a young person’s ability to save.

“One of the reasons young adults aren’t covered is because they think it’s too expensive,” says Robert Zirkelbach of America’s Health Insurance Plans, a health insurance company lobbying group. “Individual health care coverage is more affordable and accessible than is widely known.” According to Zirkelbach, 90% of young adults who apply for insurance are offered coverage, and the annual premiums average $1,359 for ages 18 to 24 and $1,534 for ages 25 to 29.

What is too expensive, are bills when their payment is not supplemented by insurance. Medical bills have the power to bankrupt you fast. Even if you are the picture of health, one false step could potentially put you in financial ruin. “A lot of people feel invincible at that age, but I would never tell people not to have insurance,” says Dave Hernandez, and founder of Wealth Engineering LLC in Scottsdale, Ariz. “It’s the last thing someone at that age thinks about because they’re in top mental and physical shape with the whole world ahead of them,” he says. “But accidents happen.”

Short term insurance policies can last a couple months to a year with an option to renew, helping people in need of intermittent coverage.  “Short term policies generally have low monthly premium, but tend to have more exclusions like pre-existing conditions,” says Zirkelbach. “If you have an extensive history it will be difficult to get coverage. But health care coverage is more accessible and affordable than is widely believed, especially for that young age group.”

One option for young workers in good health is catastrophic insurance like Blue Cross’s Tonik and Core 5000 plans. Tonik offers barebones plans with high deductibles ranging from $1,500 to $5,000. For as little as $73 a month, depending on age and health, your care will be covered (after you meet the deductible), including emergency room and hospital stays. Catastrophic plans often have a lifetime cap—Tonik’s is $5 million—so make sure it’s high enough to cover a major medical crisis. Also: They rarely include maternity benefits.

Online resources such as ehealthinsurance.com are good places to compare the premiums, deductibles, prescription benefits (as well as important caveats on mental health and maternity coverage) from all the major insurance companies. Student specific coverage is also offered, as long as you’re under 29 and either a full time undergraduate or graduate student.

Medical bills can mount quickly, either leaving you with a future of debt, or burdening your family with a large liability. So get health insurance. “For a couple hundred bucks a month,” says Fernandez, “it’s worth it.”

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