How much would you have to pay for a broken leg post-health insurance?
What’s the maximum you need to pay for Therapy before your insurance kicks in?
Can you afford a trip to the hospital during a holiday abroad?
If you couldn't answer all these questions, keep reading!!
As the Semester is picking up, I’m sure most of you are busy, dealing with having to make decisions, like whether your roommate is the right call, whether you’re going to Pass-Fail a course, or re-attempting to insert a gym session into your already packed day. The one thing I bet is not on your mind? Health insurance. Because, same. This is a guide towards creating a system for your Health in college, so you can check it off your to-do list and remain focused on the more pressing matters of the new school year.
The two boxes:
Have health insurance and make sure you understand it.
Know where to go if you get sick.
This article is written from the perspective of the US health system.
What Is Health Insurance
Health insurance is known to be the most complicated and expensive insurance you need. The average American paid $7,739 for their individual insurance in 2021. Unfortunately, it is not a cost that can be avoided since it is also the most important. There’s a good chance that as a student you’re on the super convenient college health insurance plan or if you are under 26 years of age, you are on your parent’s plan, it’s good to start knowing about Health Insurance.
The idea behind health insurance is that it is a contract between you and an insurer that requires them to pay a portion of your health care expenses in exchange for a premium. One side of the story is that you need to pay a lot of money for an event that may or may not happen. The other is that if you do have a sudden medical expense, you don't have to pay even more money to sail through it. Since it is an inevitable cost, the only option seems to be to find the best fit plan for you that optimizes your spending.
Fortunately, there are many types of health insurance and what’s a good policy for you may be terrible for someone else. For example, a person with a chronic illness might need a policy with a low deductible, broad network, and 90/10 coinsurance, making it worth the high monthly premiums. Their roommate, a semiprofessional cyclist, who hasn’t gotten so much as a cold in the past five years would have an ideal policy for with the lowest possible monthly premiums while providing catastrophic coverage if they should get, say, a cancer diagnosis.
Why Get One
It seems highly unlikely that you’ll need urgent medical care. But that's not the case and so it’s important that you have coverage so you don’t find yourself standing opposite the bill that follows. To give you an idea. If it’s a broken leg, it’s likely to cost upward of $7,500, and if you need to be monitored at a hospital for three days, it is going to come up to a staggering $30,000.
The staggering costs of medical procedures and even life-supporting medication make health insurance a worthwhile investment in your financial stability. Although it is difficult to imagine something bad happening, Health isn’t as predictable as we’d like it to be.
Emergency procedures can eat up savings and emergency funds. And pending medical costs can hurt your credit score. (Previous Post )
Apart from the fact that it’s mandatory by law for all citizens in the United States, you get free preventive care, like vaccines, screenings, and some check-ups
Lastly, health insurance helps with financial planning (Previous Post) because it eliminates surprise costs and reduces recurring costs for prescriptions and preventive care. With health insurance, you have a known maximum out-of-pocket cost each year.
The bottom line is that you shouldn’t let today’s good health keep you from securing the benefits and future protections that health insurance provides.
Understanding Health Insurance Fine-Print
While signing up for an insurance plan, you’re charged a premium which is the amount you pay for coverage of medical bills, whether or not you use any services.
Some plans have a deductible, which is a lower limit on the amount of money you need to spend toward your medical expenses before your insurance pays.
In-network services and medicines are covered under a plan, while out-of-network services may or may not be reimbursed partially and may not count toward a plan’s out-of-pocket maximum.
An important distinction to make is between
• Coinsurance - a percentage of costs you must pay for a medicine or service, or
• Co-pay - flat fees you are required to pay for prescriptions or covered services (often listed on the back of your insurance card)
Lastly, deductibles (take it from below)
What To Look For In A Health Insurance
I’m guilty of skipping Terms and Conditions almost always, but the one thing I’ve learned as I have (sorry UnitedHealth) been actively using my health insurance over the past few months is that it is crucial to thoroughly understand the plan’s Summary of Benefits and Coverage (available on their insurance website).
Step 1 is, yes, to read this hopefully helpful blog, so you are on the right path already.
Step 2, reach out to help - I walked over to the Campus's Health Centre once and they kindly explained the basics to me. Also for most insurance companies, the general trend is they are really responsive. As I’ve spoken to representatives at these companies and it has always been really smooth flowing.
Here are some keywords to look out for in their Summary of Benefits:
1. Coverage of Health Care Providers
The whole point of getting health insurance is to use it. It wouldn’t be of use to be covered by insurance that isn’t accepted by your immediate medical support. Make sure that healthcare providers and pharmacies near you accept the plan’s network.
2. Premiums
What is the basic or “membership” amount and what is the payment structure?
3. Deductibles
What is the amount you must pay out of pocket before your coverage kicks in?
For example, if your deductible is $1,000, your health plan won’t pay most expenses until you’ve spent $1,000 on expenses out of pocket. Out-of-pocket costs may include specialist visits, procedure fees, and in some cases even prescriptions. Certain preventive services, such as approved cancer screenings and vaccines, are typically covered with no cost-sharing before you reach your deductible. Patients who select a plan with high deductibles will most likely have a lower monthly premium, while lower deductibles often have higher monthly premiums. Insurers increasingly require a deductible to be met before covering most medical or pharmacy services. Be sure to check with your insurer to know if your plan has either a single, combined deductible for medical and pharmacy services or a separate deductible for prescriptions to know how much you’ll have to pay before medicines are covered.
4. Co-pay or Coinsurance
Are you aware of other costs that you may be required to pay to access care?
Don’t forget you may be responsible for other out-of-pocket expenses even after you reach your deductible. These can include:
5. Coverage of Medicines
Are your regular prescriptions covered by your insurance plan?
Each insurer has a formulary (list of medicines) covered by the plan. If a medicine is not on the formulary, it may not be covered, and patients will then have to go through a potentially lengthy process to obtain coverage. The list of covered medicines is also divided into tiers, which determine how much of a co-pay or coinsurance you may have to pay. Make a list of your current medicines, and compare it to the plan’s formulary to make sure your medicines are covered and you understand the out-of-pocket costs that may be associated with them.
Picking A Health Insurance Company
An exception to other consumption habits of not buying things you "don't need right now" or clothes that "don't fit right now but will fit after you start on your gym plan" is health insurance. It is crucial to look out for additional services that you do not need now:
Mental Health Coverage
Dental Coverage
Chance’s of ineligibility for coverage
It is also important to check your Health Insurance company wisely. Here’s what to find out about a company’s guidelines:
1. Length of Time in responding
It can be really frustrating if a company takes a long time to get back to your claims. If you file for a re-reimbursement and they take a couple of months to even start the process, you would have moved on with life and it gets tricky to revisit the topics. The best way is probably by word of mouth: find out about how people you know rate their insurance plans.
2. Responsiveness
Are they open to understanding your needs or do they deny their responsibility to cover a medical expense you underwent?
What Are Your Options in College:
Stay on a Parent’s Plan: Students under 26 have the option to stay on their parents’ health insurance plan. If selecting this option, it’s a good idea to contact the company to get details about out-of-state coverage if you need it.
Student Plans: Many schools also offer student coverage, which can be a good option for basic care. Contact your school for more details.
Health Insurance Marketplace: Another option is to purchase health insurance on the marketplace, which may allow you to qualify to receive financial help from the government to pay for your plan. You can also find out if you qualify for Medicaid.
Congratulations, you can now check off Box 1!
Know Where to Go
Once you have health insurance, take a moment to learn where you can use it if you get sick. Visit your company’s website to research your options. You can also look for in-network doctors and urgent care centers near campus using their health provider finder. This is a very important step because visits to an out-of-network doctor or hospital will be much more expensive, or potentially not covered at all, depending on your plan.
Many colleges also offer student health clinics on campus, which can be a convenient option for those with limited off-campus transportation. Check with your on-campus clinic directly to find out what insurance is accepted.
Choose a Pharmacy
Whether you take prescription medication on a regular basis, or just need to combat a one-off illness, it’s important to ensure you get the medications you need while at school. Students who take prescriptions on an ongoing basis may want to consider using a mail-order pharmacy, which ships medications to you directly. This can be a time – and money – saving option for students. Contact your health insurance company to learn more about mail order options for your plan.
Since mail-order pharmacies require advance notice to ship prescriptions, it’s also a good idea to identify a local pharmacy for immediate needs. Some schools may provide pharmacy services on campus, but a quick online search can help you identify other locations nearby. Be sure to check which pharmacies accept your coverage before having your prescription sent there.
We Need Health Insurance
I truly wish healthcare was accessible to everyone. It should be a fundamental right to be able to be in your best possible health condition. Health should not be tied to wealth. Most agree that if we had universal healthcare in America, we could save lives. A study from Harvard researchers states that not having healthcare causes around 44,789 deaths per year. 44,789 deaths per year means that there is a 40% increased risk of death for people who are uninsured. A right to health care would stop medical bankruptcies, improve public health, reduce overall health care spending, help small businesses, and all this evidence points to the argument that health care should be an essential government service. But unfortunately, the reality is that it is not.
It may not be fun, but doing your own research and comparing insurance policies is important. Don’t let a lack of understanding prevent you from developing a financial plan that accounts for all of your needs. Reach out to a trusted advisor, health service, or online resource (like this blog) to find the help you need.
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