Congratulations, you’ve graduated college! Now it’s time to start worrying about the daily ins and outs of the real world. Sure, you’ve probably experienced some aspects of the cold reality of adulthood to one extent or another, but finishing college is that milestone that says “Hooray, you’re a fully functional adult! Good luck with that!”
Health insurance is one of those pieces of reality that should be addressed sooner rather than later. That sense of invincibility that most of us acquire in our early teens and hang onto into our mid-twenties eventually does fade, and you start to realize that yes, you could get hurt, or come down with something nasty. If and when that happens, you better make sure you have a good health plan in place because being sick or injured is expensive these days.
Here’s what you, a newly minted adult, need to know about health insurance.
Consider Catastrophic Health Insurance
If you’ve graduated college with your health intact, you may want to consider this particular health insurance option. It’s only available to customers under 30 years old, features low monthly premiums and high deductibles, and is meant to address the problems of serious illnesses and/or hospitalization.
Most of these plans also cover doctor visits with a co-pay, and preventative care with no additional cost, thanks to the Affordable Care Act. Yes, the deductible is a scary thing to deal with (think of between five and six thousand dollars), but the long-term savings on the monthly premiums should offset that nicely. This is really the best policy to have if you’re healthy and not prone to engaging in potentially dangerous activities. You can read more about this option in the article “Catastrophic Health Plans: Healthy People Saving Money.”
Short-Term Medical Insurance
This option is great if you’re trying to bridge the gap between whatever health insurance coverage you had while in school and whatever health care benefits your job will provide you with. These short-term policies are cheap (somewhere between 50 and 60 dollars a month), are available for applicants under the age of 34, and there’s no guarantee that the policy will be renewed.
It’s also important to note that short-term medical insurance doesn’t meet the Affordable Care Act requirement that everyone has to have health insurance. If you’re on it for more than three consecutive months, you could have a tax penalty to deal with.
Consider A Health Savings Account
Otherwise known as an HSA, they have low premiums and high deductibles just like Catastrophic Health Insurance, but in this case it lets you set aside money in a tax-free savings account, hedging against future medical expenses. You are taxed on the net amount after the HSA deduction is taken out, so it’s conceivable that you could end up paying less in taxes. This is another of those options that are great for healthy young people.
The Parent Option
Last but not least, there’s always your parents. Thanks to the Affordable Care Act, you can stay on your parents’ health insurance until age 26. If your parents have a family plan in place and you have younger siblings, then odds are it costs the same whether there’s one child or four, so it’s worth it to just stay on the plan for the immediate future. After all, they’re already paying for it, so why not? That’s one less expense you need to worry about for now.
Striking off on your own after graduating college is challenging, and anything that can help meet those challenges should be taken advantage of. Health insurance is one of those challenges, and, as the article “5 Health Insurance Tips For College Graduates” points out, not an optional thing. Consider the above choices, and use the one that’s best for you.