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Advice for new grads about health insurance

Apr 26 2016
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Spring brings two things like clockwork: sunshine and graduation season. If you’re a new grad – or know someone who is – you know that first real job is hopefully not far off. And whether you  already lined up a position for after graduation, or you’re taking some time to figure out your next steps, it is never too early to learn how to be a smart health care consumer.

First of all, health plans do much more than just pay claims. There are lots of benefits that you may not even know about — from useful mobile apps to help you find a doctor, to wellness programs, nurse helplines and discounts on health-related purchases. So remember: make the most of your plan by taking advantage of all your benefits.

Here are 12 tips to help new grads:

1. Weigh your options before you decide. If you are under 26 and have an option to stay on a parent’s plan, you may decide that’s your best choice (assuming your parent agrees). However, you may also be able to get benefits through your own employer or on a health exchange.  Compare all your options before deciding. Once enrolled, you can only change your plan once a year during Open Enrollment (with some limited exceptions), so make sure you choose wisely for your health — and your wallet.

2. Look for opportunities to save on taxes. If you have the chance to enroll in a tax-free health account such as a Health Savings Account (HSA)— consider the tax advantages.

3. Know what’s at risk.  A Flexible Spending Account (FSA) can save you money by letting you buy medicines or other treatments tax-free. Just make sure you check the details about year-end balances. You may be able to roll over unspent funds into the next year, or you might forfeit the funds. (This is known as “use it or lose it.”)

4. Going through something big? Revisit your coverage. Usually you can reevaluate your benefit choices during key life events like switching jobs, getting married or having a child. Plans differ, but major life events typically give you a chance to change things up to better fit your needs if they have changed.

5. Consider generics for your prescriptions. When you get a prescription, ask your doctor if a generic substitute will do. They cost less than brand name prescription drugs. Many health plans used tiered pricing, too, so you pay more out of your own pocket for a brand name when a proven generic is available.

6. Stay in your network. Don’t know what your network is? Check your health plan’s website to see which doctors are in the network. Being in network means they have an arrangement with your health plan that will save you money. Always aim for in-network docs, hospitals and services. Out-of-network means more out of your pocket.

7. Take care of yourself. Annual check-ups may save you from paying big medical expenses down the road. Preventive care is generally covered at 100 percent to encourage people to get recommended screenings, immunizations and wellness checks before big problems start.

8. Need to see a specialist? Find out if you need a referral. Some plans may require a referral from your primary care physician before you can go see a specialist. Check it out before you go, or you may end up paying unexpected bills.

9. Expecting surgery or a high-tech test like an MRI? Ask about pre-approval. Your surgery or test may require pre-approval, known as pre-certification, from your health plan.  Your doctor’s office may catch this one, but do your homework to avoid surprises and delays.

10. Read the fine print. Insurance companies are required to provide you with a detailed plan description called a “Summary of Benefits and Coverage.” These documents explain in detail what’s covered and what’s not. They also explain how to appeal decisions or ask questions. All good information to know.

11. Consider the total cost. When you buy insurance, your portion of the cost is called the “premium.” You need to balance the cost of the coverage with what you would have to pay out of your pocket in deductibles, copays or coinsurance for services. Plans have a maximum amount that you will have to pay out of pocket (not counting your premium) for covered services. It is different depending on the kind of plan you choose and your coverage (individual or individual plus dependents) and it can be adjusted every year. If you know you are going to have a high-cost procedure like surgery, you might want to pay more in the monthly premium to save yourself a large bill due all at once.

12. Ask for help. Most employers (and insurance exchanges) have people who can help you understand your options and can direct you to someone who can answer any questions that come up. (And if you just need help with some basic terms, there’s lots of help online, like this glossary.)

Want to learn more about being a smarter health care consumer? Here are some more tips to make the most your of your benefits and save money on health care.