Insurance required for college...?

Question

I just recently enrolled into college and I am required to have insurance or use theirs, but their plan is too expensive!! So I currently have an insurance plan that covers my husband and I(we are both college students)...I have a 2500 deductible and a co-payment that they cover 80% and we cover 20%..what I don't understand is does maximum of 1,000 individual deductible mean that I need to have a 2000 deductible, 1000 or more(my choice), or 1000 or less?? I am quite confused about this...

Here is their policy that is confusing me:

Maximum of $1,000 individual deductible per year and standard co-payments not more than 50% of charges. (TIP: over 85%of student health claims are for less than $1,000 so if you have a $1,000 deductible, the majority of your medical expenses will NOT be covered by your insurance and will come out of your pocket!)

Answer 1

Health insurance is very expensive, if you tried to find a policy that covered 100% office calls and hospitalization you probably couldn't afford the monthly premium.

The policy that you have is to protect you against an extreme illness and hospital stay.  They have laid out for you the most out of pocket expense that you will have to pay.  Your deductible is $2500.00 per year this means you are responsible for all medical expenses up to $2500.00 then the 80/20 they pay 80 percent you pay 20 percent of all medical expenses upto $1000.00 then they cover 100%.  So if you had an extreme illness and hospital stay, your total out of pocket expense for the year is $3500.00.  That sounds like a lot of money but it really isn't when an extreme illness and hospital stay could run $50,000.00 in one year.  The $3500.00 can be paid in payments to the doctor or hospital much easier than $50,000.00 in one year.  

The insurance companies are trying to make heath insurance affordable by covering you for extreme medical issues.  Many people could not afford a high monthly premium for 100% coverage.  The insurance companies offering the choice of high deductibles allows you to know your covered and how much out of pocket expense you are obligated to pay "if" you have an illness or hospital stay.  I prefer this because 100% insurance was too expensive and if I didn't have a claim in a year I was spending more money per month for nothing.  Atleast with this type of policy, your monthly premium is lower and if you aren't sick you don't have to pay anything more.  

Example:100% medical @ $450.00 per month= $5400.00 per year.

                 80/20 medical@  $210.00 per month=$2520.00 per year

With the 80/20 policy

If you are a healty person you saved   $2880.00 per year

If your had an illness or hospital stay your out of pocket expense for a year is $3500.00, plus premium of $2520.00 thats $6020.00

Compared to a 100% policy, premium of $5400.00 the difference is $620.00 per year.  

If you are a healthy person  

For the 100% and $5400.00 premium, you got nothing

For the 80/20 and $2520.00 premium, you got nothing but saved $2880.00

Had you had an illness or hospital stay the difference is only $620.00                

Do you see that If you are a healthy person you've saved money with an 80/20 policy?

One last note, always read the exclusions on a heath insurance policy, it's easier to comprehend what's not included then to comprehend what's included. The theory being everything is included except what is excluded.

I hope I answered your questions.

Good Luck To You

Answer 2

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Answer 3

From the limited information that you provided, it would appear that the plan that you currently own is not going to satisfy the school's requirements.

The school rule that you quoted says that an acceptable policy can not have a per-incident deductible greater than $1000. Your deductible is $2000, which is clearly "greater than $1000".

In fact, the school goes so far as to suggest that a $1000 deductible is foolish, because it's 85% likely that your medical expenses will not exceed $1000 - meaning that the entire payment for that bill would come out of your pocket, without any insurance benefits being paid to you.

Here's how it works:

I fall on an icy path and injure my leg. I'm taken to the emergency room, where they take my insurance card, and then send me for x-rays. It turns out that I have a bad sprain, so the doctor gives me a prescription for a powerful pain killer, and tells me to stay off my feet for a few days. A few weeks later, I get a bill in the mail for $850.

Because your insurance deductible is $2000, you will receive no assistance from your insurance company to cover this bill. The $2000 deductible means that, every time you go to the hospital or the doctor, the first $2000 of the bill is paid by you. Anything more than $2000, the insurance company pays 80% and you pay 20%.

If you were injured in an auto accident and received a $7500 bill, you would pay $2000 right away, before the insurance company even got involved. Subtracting that first $2000, which is your responsibility, leaves a balance of $5500. The insurance company will pay 80% of this $5500, or $4400, and you'll be responsible for paying the remaining $1100.

How'd this work out? Of the $7500 bill, the insurance company paid $4400 and you paid $3100. Not the world's best insurance.

Your college rule requires that you have "better" more "comprehensive" insurance than that. An acceptable policy must have a deductible of $1000 or less.

I hope that helped. Good luck!