Health Insurance for College Graduates
1. Credits complete? Check
2. Cap and gown? Check
3. Diploma? Check
4. Health insurance? Probably not.
Graduation season is also the time to check to be sure your college grad still has adequate health insurance coverage. Many college graduates are at risk because they are no longer covered under the university's health insurance plan, they don’t have a job yet with benefits, and they may have aged out of their parents' health insurance policy.
Even though new mandates require that insurance companies cover children until they reach the age of 26, the National Institute of Education Sciences expects a 20 percent increase of students over the age of 25 in the coming years.
This gap between college graduation and a full-time job with benefits can be risky. While many young adults in their twenties are relatively healthy, they may also enjoy a somewhat carefree lifestyle which makes them susceptible to accident and injury. There are no guarantees when it comes to health concerns. A reasonably healthy 26 year-old today may find themselves in the Emergency Room tomorrow.
In today’s economy, it is risky to wait until finding a full time job with benefits. Astounding numbers of college graduates find themselves unemployed or underemployed for much longer than they ever anticipated. About 284,000 Americans with college degrees were working minimum wage jobs last year, according to the Wall Street Journal.
In addition, there is no guarantee that an employer will offer health benefits. A survey by the Kaiser Family Foundation found that only 60 percent of employers offer health insurance benefits to their employees. Of those employers who do offer health benefits, they are often more expensive and less comprehensive than an individual health insurance policy.
Because of this, it may be worth the investment to purchase an individual health insurance policy after graduation. Young people with a healthy lifestyle and low risk history are often given preferred rates on health insurance. Individual health insurance gives individuals more flexibility to choose from a wide selection of plans, to find a customized and affordable alternative to employer-based care.
Another option may be to ask the university about extended health insurance benefits for graduates. Some university plans may allow students to extend their student benefits beyond graduation for a certain period of time. This may be a short-term solution to extend coverage while shopping for an individual policy. Some policies may have specific limits or requirements, so it’s important to ask the University for information prior to graduation.
The outlook for college graduates is looking better this year than recent years. A survey released in April from the National Association of Colleges and Employers (NACE) reported that businesses plan to hire more college graduates from the class of 2013 than they did from the class of 2012.
The numbers are slowly increasing, but that’s still good news for those walking through the processional this year. Because of the slowly growing job market, the uncertainty of employer-based health care programs, and the importance of comprehensive health coverage, it is crucial that college graduates shop around for an individual health plan that meets their needs.