Short-term medical coverage for grads

Q I recently graduated from college and will be starting my new job next month. My employer has a three-month waiting period before I am eligible for its health insurance plan. What kind of insurance should I buy to cover me for those three months?

ROBERT, 23

A Like many recent graduates, you're in need of a short-term health insurance plan to cover any sudden unexpected medical costs during your waiting period. Most short-term plans offer coverage for 30 to 180 days, although some cover longer periods of up to a year should your need continue.

Unlike many traditional health insurance plans, short-term plans typically do not cover preexisting conditions, preventive care, routine exams and prenatal care. Hospital care, prescription drugs, lab tests and X-rays are among the expenses typically covered by short-term health plans. The plans are mainly intended to protect from major, unexpected medical expenses for people with a temporary health insurance need.

As with other health insurance plans, you must pay the deductible and co-insurance amounts before the insurance company begins covering costs. The deductible level and co-insurance amount you choose directly affect the premiums you will pay.

For example, a 23-year-old man living in Minneapolis could pay $35 a month for $2,500 deductible, 20 percent co-insurance (after meeting the deductible amount, he pays 20 percent, insurance pays 80 percent). On the other hand, $140 a month will get the same individual a $250 deductible with 20 percent co-insurance. (Quotes are from ehealthinsurance.com).

I would recommend choosing a plan with the highest deductible you reasonably could pay with assets you have available. This way, you would pay the lowest premiums without exposing yourself to more risk than you can handle.

To find coverage, I would first check with your college alumni association. It often offers group coverage to members at reduced cost, compared with individual plans. Next, read information online through search engine queries and get quotes for coverage at sites such as ehealthinsurance.com. Finally, ask friends or co-workers who have been in a similar situation where they found short term health insurance.

BRANDON JONES, CFP (26)