By Courtesy of USAA
5 February 2009

It’s time to turn your queasiness into action, especially if you’re one of the growing number of college grads without health insurance.

There are options that can fit your budget and health needs. The cost depends on your circumstances, like where you live, how healthy you are, and whether you’re a male or female. However, your age is in your favor, says Sam Gibbs, senior vice president at eHealthInsurance.com. “There are affordable individual policies out there, especially for young consumers,” says Gibbs. See which one of these plans fits your situation and use the health insurance glossary to wade through the terms.

Health Insurance Glossary

• Co-insurance: The percentage of coverage you are expected to pay yourself. For example, if the policy’s co-insurance is 80/20 and the medical bill is $100, insurance would cover $80 and you would pay $20 until you reach an out-of-pocket maximum, then the insurance pays 100 percent.

• Co-payment or co-pay: Usually a fixed-dollar amount that you are required to pay to receive services. Typical co-pays might be $15 for a doctor visit or prescription, and $100 for a trip to the emergency room.

• Deductible or Out-of-pocket: Amount you pay toward your healthcare before insurance begins covering eligible medical costs. As a rule, the higher the deductible the lower the plan’s premium and vice versa.

• HMO (Health Maintenance Organization): Insurance program that requires the use of predetermined facilities and doctors. In other words, you may have fewer doctors to choose from.

• Medical underwriting:  A process in which an insurer investigates and reviews your health history when you apply for insurance. The findings help insurers figure out the future risk of you getting sick, which affects how much you’ll pay in premiums.

• PPO (Preferred provider organization): Insurance program that allows you to choose your doctors and services from an approved list.

• Pre-existing condition:  A medical condition or diagnosis that existed — or was treated — before your health insurance coverage began. It may affect whether you can get coverage.

• Premium: Regular payments you make in order to have insurance coverage.

Page Two: Every option for every budget.

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The just-in-case-I-get-sick plan: Aka Short-Term Insurance

What
Short-term insurance covers the gap when you’re no longer on your parent’s policy or when you graduate from college.

Costs
Depending on where you live, your monthly cost (or premium) may start at less than $50. Your deductible (or out-of-pocket costs before insurance starts to cover your expenses) could be as low as $250.

Pros
You can pay month by month.

Cons
Only temporary. Most plans will cover you for 12 months or less. They often do not cover preventive care, such as yearly physical exams.

How to get it
Before you graduate and go off your parent’s policy, shop for student health insurance, which may be available through your college or university. If you’ve already graduated, you can purchase short-term policies directly through health insurance companies.

The I-may-get-sick-in-the-future plan: Aka Permanent Individual Insurance

What
If you support yourself through freelance work, temping, or running your own business, look into permanent individual plans that offer long-term coverage.

Costs
A monthly premium can begin around $100. The average deductible runs about $2,000.

Pros
The variety of plans available lets you pick and choose the benefits you want, such
as your doctors and hospitals.

Cons
The price of individual health insurance varies widely and usually has a high deductible. Before you start your insurance search, ask yourself two questions: Do I need prescription drugs? Is there a particular doctor I want to continue seeing? Figure out what you want and need, and then shop around.

How to get it
First, find out if your alumni association, place of worship, or a professional organization to which you belong offers access to health insurance. Your premiums and out-of-pocket costs could be lower. Then, go online to such sites as Tonik.com, GoldenRule.com, and eHealthInsurance.com to see what plans are available in your ZIP code. These resources let you compare options. Make sure that you do business with a reputable, well-known company that has a strong network of doctors and hospitals.

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The I-know-I’m-going-to-get-sick plan: Aka Individual Insurance

What
Insurance companies may do their own investigation of your health history before offering an individual health plan — a process known as medical underwriting. That means that if you have an ongoing illness or medical condition, such as asthma or diabetes, you could face a challenge finding coverage. In insurance lingo, this is known as having a pre-existing condition.

Costs
According to eHealthInsurance, it is impossible to estimate typical insurance costs related to pre-existing conditions.

Pros
There are insurers who will provide coverage, although there may be certain restrictions. For example, they may impose a “pre-existing condition exclusion period” in which they will not cover treatment related to your particular health issue for a certain length of time, usually 12 months.

Cons
Some insurers may reject your application or charge
higher premiums.

How to get it
Speak with a reputable insurance agent or broker to explore your options. If you are currently covered by a parent’s policy through an employer, you also can investigate COBRA. This federal law requires most employers to allow their children to remain covered for up to 18 months after they are no longer considered financially dependent on their parents. The cost of your premium, though, is likely to be high. Also, check with your state’s insurance commission. Most states have high-risk insurance pools that provide coverage to individuals with pre-existing conditions.

The I-probably-won’t-get-sick plan: Aka Catastrophic Plan

What
Catastrophic coverage is another name for lower-premium, higher-deductible individual plans. As the name suggests, these plans provide coverage if something happens to you that requires major medical care.

Costs
Monthly premiums range from $30 to $175 with deductibles from $500 to $20,000.

Pros
Lower-cost coverage provides some protection if you have a serious injury or illness.

Cons
Most catastrophic plans offer bare-bones coverage  and extremely high deductibles. That means higher out-of-pocket expenses for doctors’ visits and prescription drugs.

How to get it
Sort through individual policies with higher deductibles and lower premiums.

The I’ll-Never-Get-Sick Plan: Aka No Insurance Plan

Whatever your age and health, going without coverage is a bad move, no matter how invincible you feel. Period. A trip to the ER for knee surgery can quickly add up to $10,000 or even higher. A ruptured appendix or other emergency surgery can cost more than $30,000. There’s a reason why bank-breaking medical bills are the leading cause of bankruptcy in the United States. It’s very expensive to get sick when you are not insured. Trust us, you don’t want to experience it firsthand and become one more bankruptcy statistic.

Upping the age
When you turn 18 or 19 or graduate from college, you’re generally dropped from your parents’ health insurance. Now, 16 states require insurers to allow you to stay on your parents’ policies until you’re in your mid-twenties. To qualify, you need to live in the same state as your parents, but you don’t have to live with your parents.
    
For a list of the requirements for coverage on your parents’ health insurance, go to the National Conference of State Legislatures’ Web site at ncsl.org.

USAA, a diversified financial services group of companies, is the leading provider of financial planning, insurance, investments, and banking products to members of the U.S. military and their families. Named by BusinessWeek as No. 1 Customer Service Champ in 2007 and 2008, USAA provides highly competitive financial products to its 6.7 million members. For more information about USAA, or to learn more about membership, visit usaa.com.

Sources: Agency for Healthcare Research, eHealthInsurance.com, Golden Rule Insurance Co., Insurance Information Institute, Kaiser Family Foundation, National Conference of State Legislatures