SOURCE: Aetna and The Financial Planning Association

May 03, 2006 09:00 ET

Parents: Are Your Grads Ready for the Real World? National Survey Finds College Grads Likely to Fall Through Gaps in Health Insurance Coverage

Aetna and the Financial Planning Association Help Parents of Upcoming College Grads

HARTFORD, CT -- (MARKET WIRE) -- May 3, 2006 -- A new national survey finds as parents celebrate their child's graduation, they and their children may not be prepared for all the "real world" costs. When asked if their child had a medical emergency or needed health care while uninsured, only 44 percent of parents say they would pay for their child's health expenses, while 39 percent would offer to share the cost or teach their child how to take out a loan.

More than 1.4 million students will graduate from college this year -- many of whom will no longer be eligible as dependents under their parents' health insurance plan, and may no longer qualify for the student plan provided by their alma mater. While parents want to be supportive, 40 percent admit that they do not have the tools and resources to help their children plan for their health benefits.

Aetna (NYSE: AET) and the Financial Planning Association® (FPA®) are helping parents do their homework to make smart health benefits and financial decisions -- for themselves and for their children -- through the Plan for Your Health public education program ( Plan for Your Health is a free web resource for parents who are helping new grads with the transition between health plans, without becoming uninsured.

To find out what parents think about health benefits during this important transition, Aetna and FPA conducted a survey of parents of upcoming and recent college graduates to gauge their knowledge and concerns regarding their child's health benefits after graduation.

Almost half of the parents surveyed do not think they will be responsible for paying for their college graduate's health benefits, but rather, that their child's future or current employer will be responsible for providing coverage. What parents may not realize is that not all employers provide health insurance. According to the Kaiser Family Foundation, only 60 percent of companies offered coverage to workers in 2005, down from 69 percent in 2000 and 66 percent in 2003. And among the 95 percent of U.S. employers considered "small businesses," less than 50 percent offer health benefits, according to the Small Business Administration. What's more, even if a graduate lands a job with benefits, there may be a waiting period to become eligible to receive those benefits.

"Young adults make up a large percentage of the uninsured population because they are unemployed, have temporary employment, or forego coverage since they expect to be in good health," said Melissa Welch, M.D., a California-based medical director for Aetna. "Even though they are healthy, accidents do happen in this age group -- a serious event can lead to substantial medical bills for an uninsured person of any age. We want to provide parents and young adults with tips, tools and information about health benefits so that they can make well-informed decisions."

The survey also found that although 83 percent of parents say their child will not be covered under their health insurance policy or they are unsure of their provider's rules and policies on college graduates, more than one-third (37 percent) of parents of upcoming college graduates have spent no time researching or discussing health insurance. In contrast, parents whose children graduated in the past year are three times as likely to be spending two or more hours researching health insurance for their child, compared to those whose child has not yet graduated.

"As young adults take the first steps into the real world, they need to consider the financial impact of an illness or accident," said Tracey Baker a Certified Financial PlannerTM professional and former chair of FPA National Capital, the Association's Washington, D.C. area chapter. "Medical bills can pile up quickly without the added protection of health benefits. For example, a college grad could spend more than $8,000 to visit the emergency room with a broken arm. With insurance coverage, you are likely to spend only a few hundred dollars."

Considering that less than half (45 percent) of the class of 2006 will have jobs at the time they graduate and may be too old to qualify for their parents' plan, health benefits need to enter into the financial equation during the transition between landing their first job or continuing on to graduate school. While job-hunting, graduates who are under their family's plan are eligible for COBRA coverage for a maximum of 36 months; they should also research individual health plans to find the most affordable option. Graduates who have a policy through their college or university are not eligible for COBRA and should look into purchasing an individual health insurance policy.

Plan for Your Health, a partnership between Aetna and FPA, helps consumers make smart financial and health benefits decisions during life's pivotal moments -- like graduating from high school or college, getting married, changing jobs, having a baby, living single or preparing to retire. offers tools and insider tips including:

--  Health Expense Calculator estimates annual health care costs
--  Your Health Benefits Priority identifies which benefits elements are
    most important to you
--  Tips and advice for college grads and parents of college grads
Additional Survey Data

Results from the survey demonstrate parents' need for more health benefits information. Highlights include:

--  Many of the parents surveyed say they would have questions about
    obtaining health insurance for their college graduates:
    --  if their child were not receiving benefits from an employer
       (67 percent);
    --  if their child was unemployed (66 percent);
    --  if their child was going to graduate school (57 percent).
--  Forty percent of parents feel that they do not have all the tools
    and resources they need to help their children make informed
    choices about health benefits after college.
--  Almost all (95 percent) parents who don't have the tools and
    resources said that if they had this information they would be
    more involved in helping their children with their health benefits
--  More than half (55 percent) say they are very familiar with the
    rules and policies that affect how long their child is covered
    under their health insurance policy after college.
About Aetna

Aetna is one of the nation's leading diversified health care benefits companies, serving approximately 28.3 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life, long-term care and disability plans, and medical management capabilities. Aetna customers include employer groups, individuals, college students, part-time and hourly workers, health plans and government-sponsored plans.

About the Financial Planning Association

The Financial Planning Association (FPA) connects those who need, support and deliver financial planning. FPA believes that everyone is entitled to objective advice from a competent, ethical financial planner to make smart financial decisions. FPA members demonstrate and support a professional commitment to education and a client-centered financial planning process.

About Plan for Your Health

Plan for Your Health, a public education campaign from Aetna and the Financial Planning Association, gives consumers the information they need to make health benefits and financial choices that meet their needs now and in the future. The Web site focuses on five life events when women need to re-examine their health benefits -- career, marriage, family, living single and retirement -- and offers consumer-friendly tools, tips and content that support well-informed decision-making. For more information, please visit

About the Survey

International Communications Research, Media, PA, conducted a web-based study on behalf of Aetna and the Financial Planning Association. This research reflects the participation of 509 parents of recent or upcoming college graduates. The margin of error for a sample size of 509 respondents is +/-4.4%. This means that for any given percentage within this report, the true percentage range is within +/-4.4% of that reported. Interviews were completed from March 27 through April 3, 2006.

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