Q. I’m 26, just completed a master’s degree, and plan on spending a year having outdoor adventures before starting a career. My friends say I should get “catastrophic” health insurance but I’m in excellent health and wonder if I need insurance at all. Do I?
A. Yes! Your biggest risk may be breaking a leg on a mountain somewhere, but something as commonplace as an appendectomy could cost you $10,000 or more, and something as dire as leukemia could cost hundreds of thousands. By not having insurance, you’re threatening not only your own financial future but also that of your parents, who might have to raid their retirement savings to pay your medical bills.
Unfortunately, you are slightly too old to benefit from the part of the health-reform law that allows adult children to stay on a parent’s health plan until their 26th birthday. So you’ll have to buy health insurance on your own.
I’m not aware of any official definition of a “catastrophic” plan. My personal definition is a plan with a high deductible that only kicks in when you’ve spent a hefty sum—say, $2,000 or more—on health care but covers all or most of the costs above that.
Stay away from mini-med or hospital-indemnity plans that only pay up to a set amount—say, $1,000 a day for hospitalization or $500 a year for prescription drugs. They’re cheap, but for a reason: if you ever get seriously ill, they’ll cover only a small fraction of your medical bills.
And don’t buy temporary insurance, either. If you get seriously ill while you’re on it and can’t start your career as planned, the insurer won’t renew the policy. With a regular policy, the company can’t drop you as long as you keep up with the premiums and didn’t lie on your application.
Finally, choose a plan that covers all kinds of medical care, including drugs, doctor office visits, hospitals, lab and imaging tests, outpatient treatments, and rehabilitation. You can’t know in advance which you might end up needing.
Since you are young and in good health, you should be able to find a reasonably affordable plan, especially if you are willing to go with a higher deductible.
Start by visiting Healthcare.gov to look up individual policies available in your state. The site, run by the U.S. Department of Health and Human Services, allows you to compare and sort by important features such as deductibles, premiums, and out-of-pocket limits.
Good luck and have a wonderful time in the great outdoors!
—Nancy Metcalf, senior program editor
