As college graduates prepare for a new life without textbooks and daily homework, they begin to ask the big questions: How will I start paying for my student loans? Where will I find a job? And what about health insurance?
Although the first two questions can be quite challenging, purchasing health insurance should be less difficult.
The good news: Under the Affordable Care Act, parents can keep their dependents on their health plan until they turn 26 years old. They can join or remain on their parents' plan even if they are:
- Living in a separate location
- Financially independent
- Eligible to enroll in their employer's health plan
They must be within the health plan's service area to access care, whether living in or visiting that area.
For graduates opting to spend time traveling, many plans do offer coverage options when outside of the service area. These could be anything from a retail clinic to an after-hours nurse line to telehealth (virtual visits with a provider over the phone or on a computer). Parents should check with their health plan to find out what is offered.
When remaining on a parent's policy is not the best option for a graduate, Michael Byrd, chief business development officer for Sharp Health Plan says, "Try to secure a position with an employer that offers health benefits. If this is not something you are able or want to do, you can either purchase insurance directly from a health plan or pick your own plan through a state insurance exchange. Most states have their own exchange. In California, it's Covered California."
New graduates searching for insurance will find the lowest health plan premiums with an HMO plan. HMO stands for health maintenance organization. It is a type of health insurance plan that includes a primary care doctor who manages all of a member's health care needs within a network of local health care providers.
If graduates want more flexibility in how they access physicians and health care, PPO or POS plans are also options, but they will likely pay more for them:
• PPO stands for preferred provider organization. This plan offers flexibility and more choices. Members can go to any health care professional without a referral, in or out of their network. Keep in mind that out-of-pocket costs are lower when members stay within the network.
• POS stands for point of service. This plan has qualities of both an HMO and a PPO. It allows members to pay less to see doctors that belong to the plan's network, although the choices are more limited. This plan also requires members to get a referral from their primary care doctor to see a specialist.
With a little research, graduates can make the experience of purchasing health insurance for the first time a little easier.