Friday, April 25, 2008

Insurance for college graduates

New data gathered by insurers shows that parents continue to be the driving force in a college graduate’s decision to buy short term medical insurance following graduation. Parents pay the premium in more than half of the short term medical insurance policies issues to those in the 21-24 age group. Without this parental financial support, a college graduate is four times more likely to go without medical insurance for a period of two months or more following gradation.

College graduates and their families are often surprised to learn how affordable health plans can be., a leading provider of low cost medical insurance for college graduates, reports that the average cost of the six most popular health plans to young adults has dropped this year to for the first time in recent history. The price drop is due to the expansion of limited benefit plans rather than a reduction in overall health care costs.

But more health plan choices also means that there is more potential for selecting the wrong coverage. Not surprisingly, the least expensive health plans tend to be the most popular among young adults. This can lead to less than adequate protection. These health plans tend to provide up-front benefits for smaller medical expenses like doctors office visits but offer the least protection for catastrophic risks. It is important that college graduates choose the right plan for their own health situation. It appears that parents may be less likely to be involved in the selection of the insurance than in helping with the cost. Many college graduates are purchasing insurance for the first time and purchase trends indicate that some are making uninformed choices based solely on the cost of coverage or misperceptions of the risk/benefit aspects of insurance choices.

In most cases a high deductible short term medical insurance policy provides a young adult with the best protection at the lowest cost. Most college graduates and other young adults do not benefit financially by purchasing health insurance that covers routine health care like doctors office visits, lab tests and prescription drug costs.

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