Why Your College Grad Doesn’t Need To Buy Health Insurance

Invincible. That’s what it feels like to be a twenty-something.

Poor. That’s also what it feels like to be a twenty-something without a job after college.

Invincible-Feeling + Poor = Millions of young adults unlikely to buy health insurance.

Not buying health insurance seems like a good way to save money… that is, until an arm gets broken or Swine Flu makes a comeback. Without insurance, a little mishap like a twisted ankle could mean thousands of dollars in out-of-pocket medical expenses.

So what’s an unemployed college grad to do? Better yet, what can a parent do to help protect your child? You know your college grad needs insurance. And you’ll rest better knowing that your son or daughter is covered if the worst does happens.

If you’re a parent of a recent grad that doesn’t have a job or can’t afford insurance, you’re in luck.

Health Insurance Until Age 26

The Affordable Care Act allows your child to be covered under your own health insurance up to age 26. That means your college grad can get the protection he needs, even without a job that provides benefits.

And it doesn’t just apply to live-at-home, unemployed college graduates. Your children can join or remain on your plan even if they are:

  1. married
  2. not living with you
  3. attending school
  4. not financially dependent on you
  5. eligible to enroll in their employer’s plan

Even If Your Child Has a Job With Health Insurance…

If your college grad is happily employed with a great benefits package, congratulations! However, you still have the option of covering your child on your own plan.

Research the cost of covering your child on your insurance plan with the plan offered by your son or daughter’s company. You could save your grad a few hundred dollars a month by comparing plans.

Health Insurance for All?

In the past two years, despite the recession, the number of twentysomethings without health insurance has decreased. The administration gives credit to the Affordable Health Care Act for these numbers. But as you probably know, the Supreme Court is deciding whether or not “Obamacare” is a constitutional mandate, and predictions are split as to whether or not the healthcare mandate will be upheld. [Update: As of 10 a.m. this morning, Obamacare has survived the Supreme Court ruling. That doesn’t mean that there isn’t a threat of it disappearing.]

What does it mean? The benefit of covering your child on your own health insurance until age 26 could change – if not now, then perhaps after the 2012 elections or on a state-by-state basis.

Whatever happens in the next few months, take advantage of this opportunity now to protect your child with minimal cost.

Do you have any tips for helping your child save money after graduation? Did you do anything after college to save money while you looked for a job? Let me know on Twitter or Facebook, or in the comments below!

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10 thoughts on “Why Your College Grad Doesn’t Need To Buy Health Insurance

  1. Money Beagle

    Sounds like the health care mandate was upheld so it looks like this option will continue. It definitely saves the grad money but the parents shell out by having to continue the ‘family’ plan for longer, which generally means higher contributions. If you have other kids that you’d be covering anyways, then no big deal.

    1. Stephanie Halligan Post author

      Good news for twentysomethings. I’d be curious to hear from any parents who allow their employed children to continue on their family plan vs. their kid’s employer, and whether or not that saves them money.

      1. Jane

        You’re forgetting that if you live in a different state than your parents, you are likely only eligible for emergency care as a dependent on their plan. In college I wanted to see a doctor to refill a prescription, and it would have been $250 for an “out of network” doctor, or I would have to wait until the next time I was in my parents’ metro area.

        1. Stephanie Halligan Post author

          Great point. It might vary from plan to plan, as I know some friends under 26 in different states as their parents without that problem, I think. But as with any financial decision, research before you act!

  2. femmefrugality

    This was amazing for me. I’m so glad they’ve changed it. Families shell out more, but you can make your kid pay for it. It’s a lot cheaper for them to be on your plan than for them to be on their own. (I think it’s like $80.month to add children…at least up to two…in this area.)

    1. Jane

      My post-college “catostrophic” plan was $50/mo three years ago. It covered any expenses over $5000, and I could go to the doctor for non-emergency appointments 3 times a year for a $20 copay each time.

      However, it didn’t cover pregnancy, if I wanted one that did, it would have been several hundred a month.

  3. Stephanie Halligan Post author

    It’s hard not to get political, but from a strictly financial point-of-view, this is a big win for twentysomethings (ignoring the tax implications for adults and others…I don’t want to open up that can of worms!)

  4. Jen @ Master the Art of Saving

    I wish I could have stayed on my parent’s insurance until I was 26. It sure would have made things easier and less stressful.

    Our daughter is only 9, so this might not still be the case when she’s older, but it’s still cool for other familes. 🙂


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