Wednesday, February 15, 2012

Graduates Need Short Term Medical Insurance

When you graduate from college it is an exciting time. You have learned a lot from school and life. You will be moving away from friends you have made and defining yourselves based on your career choices. One thing that people often overlook is their medical insurance. Yes the new PPACA has allowed students to stay on their parents' policies until they are 26 whether or not they are in college. However you may be wasting your money on benefits you won't need if you keep the coverage that you had while you were on your parents' policy.
The policy graduates have been on usually are plans that their parents' employers pick out. The parent is happy with the plan because the employer pays most of the cost of the premium each month. These plans usually have great benefits because the owner of the company gets the same benefits as everyone else. These plans also fall into a category of plans that is tax deductible. So the premium that they pay for a policy through an employer is tax deductible for the employer, but not the employee.
These plans have great benefits and are great if someone else pays for the bill. The problem is that when you add dependents such as children or spouses, the employer no longer pays 100% of those costs like they used to. They may pay a portion of the dependent benefits. But often these days the employer only offers the option for the employee to purchase the plans with the entire cost paid by the employee. This can still be a good deal if you have chronic medical conditions or many dependents to be covered. But if you only have one dependent to cover who is generally healthy, there are likely better options for coverage.
Many people opt for catastrophic coverage to bridge the gap between graduation and their first job with benefits. Such plans are known as short term health insurance plans. These plans are simple issue and coverage can begin as early as midnight of the night you apply. The underwriting is a bunch of medical questions that you answer yes or no to according to whether or not you have the issues. Since they do not look at medical records other than what you answer on the application, the process is simple. The savings can be huge though. Some people maintain their catastrophic coverage with a low deductible and save several hundred dollars each month. Short term health insurance plans are great for people between jobs or waiting for benefits to start. If you are graduating it is a great time to consider your alternative options to maintain great coverage at a much lower cost.

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