How to Sell Health Insurance to Recent College Grads

Recent college grads have a lot to figure out as they make the transition into the “real world.” There’s the whole question of how they’re going to make a living, where they’re going to live, and how they’re going to pay for everything on their own. Health insurance may fall the bottom of the priority list because A. They don’t have a lot of extra money laying around, and B. They’re a pretty healthy 20-something-year-old.

Our Sales Tips for Selling to Recent College Grads are designed to help you understand how to explain the risks associated with not being insured and what their health care options and responsibilities are.

Tip #1: Know What the Risk Is Going Uninsured- Millennials risking a lot more than just their health when they skip out on health insurance.

  • The most obvious risk is having to pay thousands of dollars in health care in the case of an accident or serious illness.
  • Another risk is that an individual is less likely to take care of minor health issues without insurance, and they can progress into bigger problems. It’s also likely that they’ll avoid preventive care, due to the costs involved.

Tip #2: Know What Options are Available- Recent graduates actually have a lot of choices when it comes to health care coverage.

  • Keeping Mom and Dad’s health plan. Under the ACA, adult children can stay covered under their parent’s health insurance policy until age 26. This is one of the features of the ACA that the newly proposed American Health Care Act promises to keep. However, just remember that parents are not obligated to keep their offspring on their plan, and it may cost them more to do so. Plus, if the recent college grad lives in another city or state, their plan’s access to network providers may be limited or even non-existent. Kids can also stay on their parents’ plan through COBRA after they age off. COBRA is allowed for up to 36 months, but they’ll have to pay the full premium. It’s also often not the most cost effective option available.
  • Keeping student health insurance. Most college health plans actually cover kids until the end of the summer. If they still don’t have another option by the end of the summer, they can see if their student plan has a continuation option. Many plans have an additional 90 day continuation option, but your clients need to understand how the price and benefits will be effected. Some continuation plans do not include all of the benefits they received as a student- just one more reason to get their own coverage.
  • Employer-based health insurance. This is how the majority of Americans get health insurance. If they’ve secured a job after graduation, make sure they know all the ins and outs of their chosen plan. If they’re still looking for a job, it’s a good idea to take the benefits package into account. A job with a great health insurance plan could be more beneficial financially, than a higher paying job with less benefits.
  • Individual health insurance. The ACA established an annual “Open Enrollment” period for individuals to buy major medical health insurance, which will stick through 2017. Outside of Open Enrollment, your clients may qualify for a “Special Enrollment” period, if they experience a qualifying life event. One such event is losing their eligibility for student health coverage by graduating, or aging out of their parents’ health insurance.
  • Short term insurance. If they don’t have coverage through a job and they don’t qualify for a special enrollment period for individual health insurance, a short term plan can be a great option. Even if they did land a job, many employer-based insurance coverages don’t kick in for a period of time, and short term insurance could cover your client in the meantime. Short term insurance can cover a period of 30 days to 12 months, and often has very low premiums. Just remember that this temporary coverage is designed as a safety net against astronomical medical costs. They may not cover preventative care, pre-existing medical conditions or prescription drugs.

Tip #3: Take Advantage of Health Care Reform (while it’s here!)- Several components of Health Care Reform can help recent college graduates.

  • If a client experiences a qualifying life event, (Remember, losing your student coverage is one such event!) they may enroll in coverage outside of Open Enrollment.
  • Find out if they qualify for a government subside to help alleviate your health care costs. Projected income must be no more than four times the federal poverty level, or about $46,000 for a single person. Remind them that if they end up making more than anticipated this year, they may have to pay back some or all their subsidy come tax time.
  • Most plans now provide up-front coverage for certain preventative care services under the ACA. That means they don’t pay for those services, even if the deductible isn’t met.

Tip #4: Consider All Options When Pricing Health Plans- Don’t let them just choose the plan with the lowest monthly deductible.

  • When giving millennials quotes for health insurance, make sure to convey that the plan with the lowest monthly premium may end up costing them a lot more than they may think. Point out the annual deductible they’re required to meet before their coverage kicks in. (Remember, this is probably the first time they’re buying an insurance plan! Don’t expect them to know what a deductible is.)
  • Along the same lines, remind them that copayments must be paid every time they visit a provider, and they can’t anticipate how often they’ll need to see a provider in any given year.
  • Make sure to convey that the need to budget in not only their monthly premium, but any other costs associated with health care (such as co-pays, prescriptions, and the full deductible in the case of an emergency). Millennials/recent college grads are usually not familiar with this, and are often not taught how to budget. If you want them to continue to pay their premium, make sure they understand how to do this.

Tip #5: Shop Around- As with any client, it’s important to make sure you’re getting them the best deal, with the best benefits.

  • Considering many recent college grads will be starting out at low-paying jobs, and have limited budgeting experience, it’s important that they know how to budget for long-term, ongoing and potentially high costs.
  • Don’t assume just because they’re young, that they’re healthy and won’t use their coverage. That means make sure you really understand their needs before placing them in that high-deductible plan just because it’s the cheapest one. Young people are even more prone to use their coverage when they don’t fully understand the costs associated with it.

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