This Year’s Health Insurance Coverage Gap

Thanks to the passage of health care reform, a record number of 3.2M college students will have the ability to remain on – or re-enroll in – their parent’s health care plan when they graduate this Spring.

Without question, this is a positive development for both parents and graduating college students. However, there are many nuances to the coverage provisions, according to Bill Suneson, president, Next Generation Insurance (NGI) Group, which operates GradGuard.com a specialist in “right-fit” insurance for college students and insurance for new graduates.

“It is true that several large insurance carriers have agreed to provide seamless insurance coverage, beginning as soon as June 1, 2010 to those individuals under age 26 who have a right to maintain coverage under their parents’ policies effective for plan years beginning on or after September 23, 2010,” said Suneson. “However, there are still many young adults not covered by their parent’s policy and other companies not providing this option prior to the law taking effect in more than four months. This means that a significant number of college students may need temporary medical insurance when they graduate from college this month, or in June.”

Suneson suggests that graduating college students should become engaged in this “gap” coverage issue for two reasons: to make sure they have affordable medical insurance for college graduates in place the moment the commencement ceremony concludes, and to help to ensure that as many young people as possible have coverage in place as they embark as a group into the workforce.

According to a recent survey from eHealthInsurance (NASDAQ:EHTH), slightly more than one-in-three adults, ages 18 – 30, who graduated from college in the past three years stated that they did not have health insurance the day after they picked up their diploma. In the same survey, when asked what motivates them to buy health insurance, the most common answer given by recent graduates was “access to affordable insurance policies.”

HHS Secretary Kathleen Sebelius has shown every indication that she sees great value in the provision of the Affordable Care Act that enables young people to remain on their parents’ policies until they turn 26. In a letter she wrote to leading insurance carriers and employers on April 19, 2010 she said, in part: “This essential provision of the Act will enable young, overwhelmingly healthy people to stay in the insurance pool and retain insurance coverage at an important moment as they begin their adult lives and launch their careers.”

Leaders of The Young Invincibles, a Washington, DC-based national advocacy group, suggest that students who wish to become activists on this issue should support Secretary Sebelius in her efforts to encourage all leading insurance carriers to maintain coverage for young people who could be dis-enrolled as soon as this month. Meanwhile, as the issue continues to be debated, and regulations remain to be drafted, students may want to consider short-term medical insurance for graduates, such as the policy that is offered at www.GradGuard.com/medical.

Short-term medical insurance can be purchased very affordably and on a month-to-month basis, making it especially valuable to a new graduate who expects to find a job quickly, or whose ability to re-enroll on a parent’s plan is expected to occur sometime between now and September 23, 2010.