If you’re a college student, recently graduated from college, or you’re a parent of a college student or recent grad, you may want to consider an HSA (Health Savings Account) medical insurance plan.
HSA compatible health insurance plans have high deductibles (typically $2,000 to $5,000 per calendar year.) HSA plans also have VERY low monthly premium payments to the insurance companies. Finally, when someone is covered by one of these medical insurance plans he/she can open a special tax-favored savings account in a bank and pre-fund the insurance plan deductible. Because deposits to an HSA savings account are deductible from Federal income taxes the IRS puts limits to the amount you can deposit into the account. Click here for HSA Account Info.)
These unique features make this an ideal plan for students and recent graduates. The student or recent graduate can pay the monthly insurance premium (usually well under $100 per month) and the parents can help fund the high deductible in the HSA account. When the patient needs medical care he/she can withdraw money from the HSA savings account and pay for medical services and prescription medicine. The patient uses either a debit card or checking account to withdraw money for qualified medical expenses.
Beware that many of the HSA insurance plans specifically exclude maternity benefits. Blue Cross, Nationwide and Blue Shield all offer HSA compatible plans that DO include maternity benefits and are well priced, so consider these plans first. Here is a good description of the Nationwide HSA compatible health insurance plan.
HSA plans are more complicated but they allow you to obtain health insurance at a low cost.