Health Insurance for New College Graduates – Shopping Around for Affordable Coverage

May 3, 2008

Health Insurance College Graduates

Buying health insurance is probably the last thing a new college graduate wants to research as they deal with the multitude of changes that accompany their sudden leap into the real world.

Unfortunately, your change in status from student to regular person will also mean changes in your health insurance coverage. For the last several years you may have been on your parent’s insurance plan or covered by student insurance but after graduation, you are likely on your own.  As a result many college graduates simply go without, which can be one of the worst decisions you can make for your health and your wallet. 

College Graduate Health Insurance

Risks of Going Without Health Insurance
If you don’t have health insurance you’re more likely to avoid needed treatment or preventive care due to the costs involved. In the event you’re faced with major health issues that demand treatment you could find yourself deep in debt if you don’t have any type of catastrophic coverage.  Even if health insurance seems like something you can’t afford right out of school it’s worth taking the time to research the options and see what form of coverage you can squeeze into your budget.

Employer Health Insurance
If you’ve landed a job, chances are you have some decent options for health insurance coverage. Group health insurance provided by many employers is often the most affordable type of insurance available to you.  Unfortunately, the rising cost of insuring workers is causing some employers to reduce the benefits the plan offers or drop health benefits all together.  You could be faced with increased deductibles, higher premiums, or both but it’s still often better than having to find insurance on your own. 

Make an appointment with your human resources representative to make sure you understand and are taking advantage of the health benefits available to you.  If you’re still looking for a job, make sure you take the benefits package into account as you’re weighing your options.  A good health insurance plan, along with things like dental, disability, and life insurance can be worth a lot of money.

Short Term Insurance
If you don’t have a job yet or won’t be starting one for several months you may want to look into short term health insurance.  You can often buy insurance a month at a time for up to 6–12 month terms.  A quick quote from shows plans ranging from $30–$80 a month.  In some cases if you pay up front you might be able lower the premiums.

This insurance coverage is designed as a safety net against enormous medical costs.  It generally does not include physical checkups, prescription medication plans, or other types of preventative care needs.  Short term insurance gives you coverage in the event of emergency situations or catastrophic events.  The main point of buying this insurance is so that you don’t end up with huge medical bills if you end up in the hospital with some major health issue.

Long Term Insurance 
If you don’t anticipate having a job for quite a while or your employer doesn’t offer health insurance than a more permanent plan may what you need.  The good news is that unlike short term insurance, regular insurance plans will include things like preventative care, prescriptions, and sometimes even dental care.  The bad news is that they are also more expensive. Journalist Steven Rosen found the following quotes when searching for insurance for college graduates:

“A healthy 22-year-old male nonsmoker, for example, would pay a premium of $113 a month for a Humana individual policy with a $2,500 deductible, a prescription drug benefit and dental coverage. Three other policies I checked — from Blue Cross and Blue Shield, Aetna and Coventry — had premiums in the range of $105 to $115 a month.”

Compare those prices to the short term insurance options and you’ll see they’re considerably higher. Of course one way to reduce the premiums is to go with a higher deductible.  If that’s a new term for you, the deductible is the amount of money you will need to pay for covered health care needs before your insurance company starts putting money in.  In general the higher your deductible, the lower your monthly payments. 

Insurance Choices
As you can tell from the various options we’ve covered, the best insurance for a college graduate depends on your individual situation.  Factors such as whether you have any employer provided insurance, the length of time you’ll be without insurance, any pre-existing medical conditions, and how high a deductible you’re willing to pay all go into picking the right coverage for you.

Of course, you always have the option of not getting any health insurance at all but just be aware of the risk you’re running should you run into medical complications.  Chances are you already have some kind of school loans to pay off.  Do you want to run the risk of incurring high medical bills to add even more debt to the amount you owe?

Your best bet is to research all of the available options and determine which one you can afford.  I mentioned earlier, sites like those allow you to search and compare the various health insurance plans available and determine which is going to best fit with your overall lifestyle, budget, and needs. 

College Graduate Finance Tips
Unfortunately buying health insurance isn’t the only financial decision you’ll have to make as you leave the college life.  Check out this cheatsheet of financial tips for college graduates and learn a little more about topics such as investing advice for new college graduates.


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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12 Responses to Health Insurance for New College Graduates – Shopping Around for Affordable Coverage

  • Jerry

    So many young people think they can go without health insurance but it’s really a risk that you shouldn’t take. You never know where life will lead and what may happen to you accident or otherwise. These are great tips to show there are affordable options out there if you’re willing to look.

  • Terri

    Great article, thanks for the information.

  • Helene Zemel

    Thanks for contributing this informative article to my Take Charge of Your Health Care Carnival. It’s nice to know that there are some affordable health insurance choices for college students and recent graduates.


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