Watching Your Wallet: Health Insurance 101

Published on http://www.aggietownsquare.com on November 17, 2009.

Of all the nasty, big, scary, confusing and icky financial matters in this world, I think insurance may top the list. Perhaps it was simply the way I was raised and perceived insurance. My dad has owned and managed his own business for the past five years, and one of the most complicated implications of self-employment has been finding an insurance plan that will cover our family of eight. We like to consider ourselves healthy, contributing members to society, but health insurance companies don't seem to like the idea of past knee surgeries, heart inconsistencies, kidney stones and some stitches, broken bones and sprains here and there. Needless to say, I have many memories of my mom filling out long and detailed applications for different health insurance plans. Fortunately, we have been able to find a health insurance plan that fits our needs but has definitely been very expensive since it is not subsidized by a large company. I was curious what health care plans were available to students, and in a few years when I am no longer on my family's health insurance plan, what health insurance options I will have? So, I took a trip down to the Student Health and Wellness Center and talked with Jim Davis, the director of the center, about health insurance and how it concerns students.

Davis said according to surveys completed by the Student Health and Wellness Center, about 81 percent of students on campus are insured, either by their parents' plan, university plans, plans through their employers or from independent insurance providers, like Blue Cross Blue Shield, Altius or Etna. He said most USU students are still insured under their parents, but according to Utah law are emancipated from their parents' plan either when they marry or turn 26. After that, Davis said students have several options. But, before we outline the health care options, let's define some important insurance terms.

- premium: the payment for insurance- a flat rate paid annually, semi-annually or monthly regardless of the health services used.

- deductible: a fixed amount (in addition to the premium) one must pay before the insurance coverage begins.

- co-pay: a fixed amount or percentage (in addition to the premium) one must pay each time health care is accessed.

- co-insurance: a required percentage a person must pay after they meet the deductible.

Davis explained these additional costs serve as a deterrent so people don't use expensive venues like the ER when their concerns could be addressed at less expensive venues like the SHWC.

Now that those are understood (or not understood ...), let's move on to our health care options as students.

1. Go without health insurance. Davis said students who choose to go without health insurance do so simply hoping they don't get ill or injured, and if they do, that it will be minor or will have assistance from someone to pay the cost. The upside? It's very cheap. The downside? Besides the services offered at the Student Health and Wellness Center and necessary stabilization in the ER if necessary, they will not have access to health care services for major injuries and illnesses, and when accidents happen they will have to cover the costs themselves. Financially, going without insurance can be completely devastating. One slip, one car accident, one major illness could send you thousands of dollars in debt. When I asked Davis if he had any horror stories about students without insurance he said, "I have horror stories every day." Going without insurance is certainly something Davis said he would not recommend.

2. Pay for the University Student Health Plan. The university offers health plans to students, their spouses and children. Davis said the plan is heavy on the ability to cover catastrophes and weak on prevention because students and their families have access to the Student Health and Wellness Center for minor medical needs and preventative services. For a single student to receive health insurance for one year, Davis said the premium is about $1,700. If both spouses are students they can both receive the plan for $1,700 each (a total of $3,400). To add a spouse who is not a student it costs around an additional $3,000, and to add children it costs $1,200 per child or up to all children for about $3,000. So, for example, let's say we have a student, his/her spouse who is not a student and their child who would like health insurance. The total would be about $5,900 per year. On the surface, that isn't cheap. However, with closer examination of the student plan, Davis said it is very comprehensive and covers pregnancy and obstetrics, something most independent insurance companies don't do without an additional $5,000 cost per year.

3. Choose an off-campus private health care provider. If want health insurance but aren't covered by an employer and don't want a student plan, your only other option is a private health care provider. Davis said these plans can get pretty pricey. It also could be difficult to find a company that covers you if you have a hairy medical history because of the concept of underwriting, or denial of insurance based on previous injuries or health conditions. This is why finding a plan that covered my family was so difficult; the companies didn't want to cover us if previous health conditions could return for costly health bills in the future. Another downside to private health insurance is that most don't cover pregnancy and obstetrics without adding $5,000 to the premium each year.

So to have insurance or to not have insurance? It is certainly expensive, but isn't it worth it for the security? It's not necessarily an easy decision, especially for a college student barely making it after tuition and housing payments are due. But Davis made an important point about students rationalizing going without health care.

"To the generic student I ask why would you ever come here not having a place to live, why would you ever come here planning to starve with no food, why would you ever come here planning to be cold with no clothing? If the answer is, ‘Well I wouldn’t, then why would you ever come here planning not to have health care?"

Davis said overall, the university student plan is a great option for students looking for a comprehensive and reasonably priced insurance plan. Davis reminded that although the plan and health care in general may be expensive, the reason for the high cost is because our high expectation of quality. Davis pointed out that many students don't mind driving old beater cars, wearing second-hand clothing or living in run-down apartments, but they do expect the very best health care and with that often comes a high price.

So what are your thoughts on health care? Is it worth it for the security and peace of mind or is it a waste of money? If you are no longer on your parents' health care plan, how do you cover health care costs? Comment below and let me know what you think.

Bargain of the Week: Use the "Aggie Buck," a coupon insert in The Utah Statesman, to receive $2 to $3 off places like Tummi Yummi's, Pita Pit, Indian Oven, the Fun Park and others.

Each week I'll be sharing a tip or bargain of the week – ways to save money or make the most out of it. Got an idea or heard about a discount? Please comment below or send me an e-mail.

Karlie Brand is a junior in public relations. "Watching Your Wallet" will appear online each Wednesday. Questions or comments can be sent to karlie.brand@aggiemail.usu.edu