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A highly effective but little-known strategy for controlling medical insurance costs will become a bit less attractive after September 1 when the nation’s leading issuer of medical insurance raises rates for policyholders over age 29. This change primarily affects self-employed individuals who maintained their own health insurance plans after graduation from college.
Students who purchase private medical insurance enjoy more liberal coverage than the plans typically offered through their parent’s plan or their own college or university. These insurance plans cover treatment from any doctor or hospital throughout the U.S. without the need for a referral or pre-authorization. Premium rates are typically about $500 per year for those under age 30. But the best part of this coverage is that it can be continued year after year long after graduation as long as you need the coverage. As a result of this renewability provision, some adults are able to enjoy high quality insurance coverage for less than $1000 per year for the next several decades.
Fortis Health, the largest issuer of student insurance policies, announced that it is raising rates for policyholders over age 29. The new rates will be about 15% higher. While the new rates are probably still attractive compared to regular medical insurance policies, there are other alternatives for older and non-traditional students. Fortis’ rates for short-term medical insurance or permanent individual insurance with a high deductible might be a better deal in many situations. An alternate health insurance plan from Clarendon Insurance Company often offers 3 years of coverage to individuals over age 29 at a lower price than the Fortis plan. Rates and enrollment for all of these plans are available online at www.MedSave.com.
Tony Novak, MBA, MT, is a financial adviser based in Narberth, Pennsylvania. He is editor/publisher of “Tax and Benefit News” and moderator of the tax forum for financial planners at “Financial Planning Interactive”. He is available by telephone at 1-877-529-7435 to address public inquiries on tax and benefit planning issues free of charge through OnlineAdviser service sponsored by www.MedSave.com and www.FreedomBenefits.com.
