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Student_Health_Insurance
| Student Health Insurance
Students often wonder if they really need health insurance. It
seems like a reasonable question when you are young and healthy
and seemingly invincible. After all, almost everyone who knows
how to access the health care system is provided with basic
health care services and acute care (like emergency care) in the
United States, regardless of whether or not they have health
insurance. Young adults tend to use health care services less
often than any other group. The odds are that a young adult will
go more than 12 months without any need for health care. Even
among those who need health care, the likelihood of exceeding
$1000 annual healthcare expenses is very small. So it is
reasonable to wonder whether a young adult really needs health
insurance at all.
But the situation changes when we consider the more extensive
and more costly types of health care. The ability of a patient
to obtain top quality medical care for the most serious types of
health care - things like transplants, extended hospital care,
physical rehabilitation, and long term outpatient care - depend
more on whether the patient has adequate health insurance than
any other factor. A simple attack of appendicitis could easily
wind up costing more than $25,000. Even an affluent family will
have difficulty arranging adequate medical care without
insurance coverage. Unfortunately, if you wait until you need
this type of care it will be difficult or impossible to buy
health insurance that covers these items. Often the most
immediate insurance concern for young people is the fact that
most colleges, trade schools, internship programs, sports teams,
community-sponsored travel opportunities and many other
activities require health insurance as an admission requirement.
Without health insurance, you do not pass "go". So there is
usually no question about it - most young people with ambitions
to advance their education need to have some type of health
insurance. Coverage Options There are many types of health
insurance plans available to young adults. The most popular
plans are listed below. Parent's Policy - Most students continue
to be covered under a parent's policy. If this option is
available, it is almost always the best option. But most health
plans require that proof of full-time enrollment be provided. Be
aware of the maximum age for this benefit. In many cases this
coverage will expire when the student reaches age 23 (or at
another age as stated in the insurance policy).
Employer Group Coverage - Most employers provide health
insurance to their full time employees and pay for most of the
cost of this employee benefit. This is called group health
coverage. This benefit is completely under the control of the
employer. Many people do not realize that there is no
requirement for an employer to provide this benefit. Most group
health plans require that new employees wait a few months before
becoming eligible for coverage.
School-Sponsored Coverage – These are usually uninsured managed
care arrangements to provide care to students in the local area
of the college or university.
Student Medical Policies – These are privately insured major
medical policies designed specifically for students. These are
portable and offer coverage to the student in any location in
the U.S. These plans also cover graduate students, and are
available regardless of age or health. In most parts of the
U.S., students can buy a high quality health insurance plan for
less than $70 per month at www.medsave.com.
Short Term Medical Policies - Interim or gap insurance policies
are available to cover from one to 12 months. This coverage is
inexpensive and easy to obtain online in most states. The
quality of the coverage is excellent except that it does not
cover pre-existing conditions. These provide coverage in the
U.S. only.
Individual Medical Policies - Permanent policies that you buy
directly from an insurance company offer excellent coverage,
strongest financial guarantees, and the most stability. These
often provide worldwide coverage. But all this comes at a higher
price and coverage is issued for a minimum of 12 months.
Travel Coverage / International Policies - Students planning
overseas travel should purchase a separate medical insurance
plan for the time that they are traveling, since most student
health plans do not cover charges incurred outside of the U.S.
These policies are specifically designed to pay for medical
expenses and deal with the other international complications
(language, currency and business issues) typically incurred
while obtaining medical treatment overseas.
Terms to Know Deductible or Co-payment - this is the portion of
the bill that you pay before the insurance comes into play.
These help reduce the cost of the insurance. HMO - stands for
"health maintenance organization". The HMO may pay to keep you
healthy, rather than only cover problems hen things go wrong.
HMOs tend to be popular among young healthy people, but
criticized by people receiving more serious medical care.
Private physicians tend to feel that they lose control over the
quality of a pateint's care when an HMO is involved. Indemnity
plan - means that the policy reimburses you for any ordinary and
necessary medical expenses. This is the least restrictive type
of coverage but also the most expensive. Managed Care - this
means that the insurer has some authority to influence the type
of health care you are provided. This cuts healthcare costs but
may also limit your treatment. Pre-existing condition - a
medical situation that started before your insurance policy that
may not be covered by the health insurance policy. Premium - the
cost of the policy, usually ranging from $25 to over $200
monthly. Tax-deductible - reduces your taxable income and
thereby reduces your total tax due at the end of the year. Most
health insurance is not tax deductible by individuals. Tax-free
- the benefit provided by health insurance is usually tax-free.
This means the value of the coverage received as well as any
cash benefit paid as the result of a claim. Underwritten - this
means that not everyone will be accepted because acceptance is
based on individual medical history. The insurance company
reviews each application and selects the healthiest applicants
for enrollment. Premium rates are lower for those accepted, but
these plans offer no solution for people with pre-existing
health conditions.
About the author:
Tony Novak, MBA, MT is a writer and financial adviser in
Narberth, PA focusing on tax and employee benefit issues. His
businesses www.MedSave.com and Freedom Benefits Association
provide online benefits enrollment for thousands of individuals
and businesses nationwide.
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