eHealth Provides Health Insurance Advice for 2017 College Grads With Limited Health Insurance Options
Fewer plans, strict new enrollment rules, and increased costs complicate insurance options for college grads
Young adults frequently purchase health insurance on their own after leaving college, though many anticipate becoming eligible for other forms of coverage (such as employer-based coverage) in the future. Ongoing voluntary surveys of eHealth shoppers show an increase every spring/summer (compared to the fall) in the number of recent college grads under age 24 who expect to only need individually-purchased coverage for less than a year:
Question: “How long do you expect to need coverage?”
|“Less than 12 months”||64%||54%||69%||58%|
|“12 months or more”||36%||46%||31%||42%|
Young men and women graduating from college this year will find themselves in an unprecedented situation. Many may have difficulty finding, qualifying for, or affording self-purchased health insurance – especially with the recent uncertainty in the health insurance market.
- There are fewer major medical plans available. Some major insurance companies have left the individual health insurance market. In nearly one third of U.S. counties, college grads may have only one insurance company to choose from for Obamacare-compliant coverage. By 2018 shoppers in several states may have none at all.
There are stricter enrollment rules. In
February 2017, the Centers for Medicare and Medicaid Servicesissued rules that make it more difficult for applicants to claim they have experienced a qualifying life event allowing them to purchase coverage outside of the annual open enrollment period.
There are new restrictions on short-term health plans.
Short-term health insurance plans provide a limited but valuable
option for those who do not qualify for or cannot afford major medical
coverage, but new rules that took effect in
April 2017reduced the maximum coverage period for a single policy from 12 months to three months.
- The cost of major medical coverage continues to increase. As reported in eHealth’s most recent Price Index Report, the average monthly premium for individual unsubsidized major medical health insurance increased 18% between 2016 and 2017, or 39% since the 2014 open enrollment period, when major provisions of Obamacare first took effect.
Top 5 Health Insurance Tips for 2017 College Grads
1. Mom & Dad’s plan – When to say “Thanks but no thanks” - Current law allows your parents to keep you on the family health insurance plan until your 26th birthday, and many grads get covered that way. However, buying coverage on your own may make more sense if you live in a different city without access to the network providers for your parents’ plan or if you can save money by purchasing coverage for yourself that better meets your personal needs.
2. Special enrollment periods – Use ‘em before you lose ’em - If
you want to purchase a major medical Obamacare-compliant health
insurance plan on your own, you need to do so during the annual open
enrollment period (which typically begins
3. Obamacare subsidies – Understand the risks and rewards - As a
single person, if you earn less than about
4. Obamacare taxes – Avoid the sting of an unexpected tax hit - If
you go without major medical health insurance for more than two
consecutive months during the 2017 calendar year, you may be subject to
an Obamacare tax penalty. The penalty for 2017 is
5. Obamacare alternatives – What is packaged medical insurance? - Some people simply cannot afford to purchase major medical coverage or they don’t qualify for coverage because they haven’t had a qualifying life event. Where can you turn if you still want some protection against unexpected medical bills? Other insurance products that may be available year-round include short-term health insurance plans, accident insurance, critical illness insurance, dental or vision insurance, etc. These may be purchased individually or conveniently purchased together as a recommended package of medical insurance products. Coverage under products like these can be significantly more affordable than major medical coverage, but keep in mind that these plans will not protect you from Obamacare tax penalties and do not typically have Obamacare features such as coverage for pre-existing conditions or the full set of minimum essential benefits required by Obamacare.
How Much Does Health Insurance Cost for 2017 Grads?
It helps to know what you’re looking at when it comes to the cost of
health insurance. Below, eHealth provides average premiums and
deductibles for major medical and short-term health insurance plans
selected by eHealth shoppers aged 20-25 during the 2017 open enrollment
For major medical coverage:
$231was the average monthly premium
$5,058was the average annual deductible
$161was the average monthly premium for a catastrophic level plan
$7,149was the average annual deductible for a catastrophic level plan
$362was the average monthly premium for gold level plan
$704was the average annual deductible for gold level plan
“Catastrophic” plans tend to come with higher out-of-pocket costs and are typically only available to people under age 30. “Gold” plans provide the second-highest level of coverage, in terms of cost-sharing, among Obamacare-compliant major medical plans.
For short-term health insurance plans:
$72was the average monthly premium
$6,024was the average annual deductible
Short-term health insurance plans and other insurance products that are not major medical plans provide limited coverage for a limited period of time. They typically exclude coverage for things like preventive medical care, pre-existing conditions, and maternity care. It may be possible to be declined for such plans due to a pre-existing medical condition. Despite this, short-term plans and other insurance products that are not major medical plans can still provide a valuable level of protection against unexpected medical costs.
For more information about major medical costs and trends, refer to eHealth’s Price Index Report for the 2017 Open Enrollment Period.
For more health insurance news and information, visit eHealth's Consumer Resource Center.