A Real-World Health Insurance Primer for 2010 College Grads: eHealthInsurance Answers Frequently Asked Questions
April 26, 2010 | Consumer Advice
MOUNTAIN VIEW, CA—April 26, 2010 – eHealthInsurance (NASDAQ: EHTH), the leading online source of health insurance for individuals and families, today released a series of frequently asked questions (FAQs) designed to help 2010 college grads better understand their health insurance options.
A recent Kelton Research survey sponsored by eHealthInsurance has shown that more than one in three (37%) graduating seniors in the past three years found themselves without health insurance the day after graduation1. Within three years of graduation, over twenty percent (21%) were still without health insurance1. This year’s graduates will face special challenges when it comes to obtaining employer-sponsored health insurance. Hiring of new college graduates is expected to increase this year compared to last, but the National Association of Colleges and Employers reports that employers still plan to hire 16.7% fewer college graduates in 2009-2010 than they did two years ago in 2007-20082.
Provisions of heath reform scheduled to become effective in 2010 will provide some protections for college students, graduates and other young adults:
- Those who buy their own health insurance in the non-group health insurance market will enjoy added consumer protections
- Those under the age of 26 will also have the option to maintain health insurance coverage through their parents’ policies
- Those with pre-existing medical conditions but without the option to move onto a group or family plan may be able to join new high-risk health insurance pools
However, such provisions will not guarantee coverage for every graduate and there are no financial safety nets for young adults who remain uninsured. Anyone incurring a major medical expense due to injury or illness will still be responsible for his or her own medical bills.
The following FAQs are designed to help new college grads navigate these and other issues to find the right health insurance for their needs and budget:
Question: I’m graduating college this year. How does health reform impact me?
Answer: Health reform’s most dramatic provisions won’t come into effect until 2014 but there are several changes scheduled for 2010 that may help new college graduates:
- Individuals purchasing health insurance on their own will enjoy stronger protections against policy cancellations and dollar limits restricting their total benefits
- Beginning September 23, 2010, young adults under age 26 can be covered under a parent’s health insurance plan; some insurance companies will allow grads to enroll earlier than this date or simply retain their coverage after graduation; in other cases, you may need to wait for the next open enrollment period before signing up for your parents’ plan
- Also beginning September 23, 2010, new health insurance plans will be required to provide more robust coverage for preventive care services
- Within 90 days of the bill’s signing, high risk pools will be established in which persons with pre-existing medical conditions -who might be declined elsewhere- can obtain coverage if they’ve been uninsured for six months or more
Question: What are my health insurance options after graduation this year?
Answer: There are five basic options for graduating seniors who find themselves uninsured after graduation in 2010:
- Find a job with employer-sponsored health insurance coverage – If you’re one of the lucky ones this year, you’ll find employment right out of school with a company offering you health insurance.
- Purchase health insurance on your own - In most states, there is a broad range of individually-purchased health insurance plans to choose from, and healthy young adults may find it especially affordable. Work with a licensed online health insurance agent like eHealthInsurance to get quotes, compare plans and apply for the plan best suited to your needs.
- Get back onto your parents’ plan – If your parents have health insurance and you’re under the age of 26, you may be able to re-enroll in their policy.
- Purchase short-term health insurance – A short-term health insurance plan may provide you with several months of basic protection while you’re waiting for another health insurance option to become available.
- Go uninsured – Unfortunately, many of today’s grads will go without coverage and leave themselves open to crippling debts resulting from unexpected injury or illness. Be smart and don’t take this option if you can help it. No one should start off his or her adult life buried under a mountain of avoidable debt.
Question: If I choose to go back onto my parents’ plan, when can I do that?
Answer: Health reform legislation requires that insurance companies allow adult children under the age of 26 to re-enroll in their parents’ plans beginning in September, 2010. Some insurers are allowing earlier enrollment, or else allowing students who are currently covered on their parents’ plan to keep their coverage after graduation and avoid an uninsured summer. In other cases, grads may have to wait until the plan’s first open-enrollment period after September 23, 2010 before they can enroll in a parent’s policy. To learn more, contact your parents’ Human Resources department or insurance company.
Question: Isn’t there a new government-sponsored plan I can sign up for this year?
Answer: Not necessarily. The final version of the health reform bill signed into law by President Obama did not include a so-called ‘public option’ health insurance plan managed by the federal government. Beginning in 2014 there will be new insurance policies for individuals and families available from not-for-profit insurance carriers. But if you have a qualifying pre-existing medical condition which might make it difficult for you to get coverage on your own this year, you may be able to sign up for coverage through a high-risk pool. State high-risk pools are available in many states today and health reform legislation will expand the scope of high risk pools between 2010 and 2014. However, high-risk pools are generally open only to persons who have been uninsured for six months or more and the costs of coverage under existing high-risk pools are notoriously high.
Question: Are there any good reasons not to go back onto my parents’ health plan?
Answer: Yes. You could save money by considering other options. Talk to your parents and ask them to find out how much their monthly health insurance premium is likely to increase if you’re added back onto the policy. Then take a look at your options in the private health insurance market. Get quotes and compare plans from leading health insurance companies in your area and see if it makes more sense for you to purchase coverage on your own. Your parents may be willing to help you fund your own coverage if an individual plan provides you with the protection you need while also saving them money.
Be careful not to cancel any current health insurance plan until you are approved for coverage under a new policy.
Question: Isn’t it too expensive to purchase coverage on my own?
Answer: Not necessarily. Healthy young adults in many states can find individual health insurance plans available for $70 a month or less. Health reform is making individually-purchased health insurance more attractive through added consumer protections against exorbitant rate increases, cancellation of your policy after you become ill, and arbitrary caps on your lifetime benefits. It’s worth doing a little research online to understand what’s available in your state. If you prefer to talk with a licensed agent by phone, call eHealthInsurance at 1-800-977-8860.
Question: Are there any special risks in short-term health insurance coverage?
Answer: Yes. Short-term health insurance is a good choice for some, but not for everyone. Most short-term plans do not cover services like prescription drugs, women’s health or preventive care services, and they typically will not cover care for pre-existing medical conditions, even if you’re approved. However, if coverage under a parent’s plan isn’t an option for you and you can’t afford to purchase individual coverage, a short-term plan may still provide you with a layer of temporary protection that can save you money in case of serious illness or hospitalization.
Question: What if I have a pre-existing condition? Can’t I be turned down when shopping for coverage on my own?
Answer: Yes, in most states it is still possible to be denied coverage due to your medical history. In 2014, when the final provisions of health reform are phased in, this will no longer be the case. Until that time your options are limited to one of the following:
- If your parents are insured, you may be able to enroll in their health insurance plan without fear of being declined for medical reasons
- You may be able to continue with your current health plan through COBRA, the federal law allowing consumers to temporarily extend their group health insurance coverage at their own expense in specific circumstances
- If you can demonstrate a history of credible coverage, you may qualify for what’s known as a “HIPAA” health insurance plan through various insurance companies – talk to a licensed agent like eHealthInsurance to learn more
- If you’ve been uninsured for at least six months, you may qualify for coverage under the new federal high-risk pools that are due to open to the public 90 days after the signing of the health reform bill
- You may also qualify for other state-based health insurance options for those with pre-existing medical conditions – contact the non-profit Foundation for Health Coverage Education (www.coverageforall.org) at 800-234-1817 for more information
Question: My parents can’t add me to their coverage and I can’t afford it on my own. What are my options?
Answer: Until 2014, when federal subsidies are made available to help qualifying persons afford health insurance, we suggest the following:
- Make sure you really can’t afford it on your own – Work with a licensed online agent like eHealthInsurance to get free quotes for insurance plans in your area
- If you’re lucky, you may land a job that offers health insurance benefits, but if not, then:
- Contact the Foundation for Health Coverage Education to find out what low-income government-sponsored health insurance options may be available in your state; visit www.coverageforall.org or call 800-234-1817
1 From a survey conducted in March 2010 by global insights firm Kelton Research and sponsored by eHealthInsurance. To learn more about the survey results, refer to eHealthInsurance’s April 20, 2010 press release available at: http://news.ehealthinsurance.com/
2NACE, Job Outlook 2010 Spring Update: http://www.naceweb.org/Research/Job_Outlook/Job_Outlook.aspx
eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, the nation's leading online source of health insurance for individuals, families and small businesses. Information and resources are available on various health plans, ranging from individual and family, short-term medical, and Medicare insurance. Consumers can get quotes from leading health insurance carriers, compare plans side by side, and apply for and purchase health insurance. eHealthInsurance is an online marketplace licensed to sell health insurance in all 50 states and the District of Columbia. eHealthInsurance and eHealth are registered trademarks of eHealthInsurance Services, Inc. For more information, see www.ehealthinsurance.com.