Health insurance has been a hot topic of conversation in the news for over a year now. The Affordable Care Act has been enacted in full with the start of this calendar year. Now we are all required to have health insurance or pay a penalty for not doing so.
If you have insurance through your employer, your spouse or your parents, you are all set. Or perhaps you bought a policy in the fall that covers you for the full year. If not, you have some decisions to make in the VERY near future. You have a few options available to you:
You can purchase the Penn State student health insurance policy offered through Aetna. The deadline to purchase this policy for the spring semester is January 22 (that’s WEDNESDAY!!!).
- You can purchase insurance through the Affordable Care Act insurance exchanges. Through this venue, you may qualify for a tax credit that reduces your total cost, so it may actually be cheaper than the student policy (but it might not).
- You can do your own research and buy a private health insurance policy.
- You can tempt fate, pay a penalty of 1% of your income or $95, whichever is greater (up to a maximum of $285), and hope and pray that you don’t end up sick or injured.
Now let’s talk a bit more about why you should NOT choose option #3. You should always approach health insurance assuming that you are going to experience a major illness or injury. If you are diagnosed with cancer, will you be able to afford treatment? If you are in a serious bicycle accident and need surgery on your arm, will you be able to pay for that? The answer is easy. Unless you are independently wealthy, you definitely need to have health insurance. Otherwise, you could ruin your financial future with a huge medical debt that will haunt you for decades.
So now that we’ve established the importance of having insurance, how do you select the right policy? There are a lot of things to consider. What is the cost of the premium? How much are co-payments? How much is the deductible? How much is your co-insurance responsibility? How high is your out-of-pocket maximum? Always assume you’re going to have a major illness or injury…then select the policy that gives you the best combination of these elements for your budget. If all this jargon has left you scratching your head, take a look at this classic Moneywise Tip for a quick primer.
If you know you need to buy health insurance but are baffled as to how to pay for it, talk to your Financial Aid Director. She can help you build it into your financial aid budget.