topic Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans? in Relationships and Money

Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Wed, 03 Apr 2019 20:43:10 GMT

My company reimburses $700 per month for my medical insurance. My student loans are $700 per month. Should I cancel my medical insurance and use the medical reimbursement for my student loans, instead? Do I need to tell my company? Currently, there is no company benefit for educational needs. I go to the Doctor no more than two times per year for preventative care and to renew my prescription. Thank you for your input.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Andypanda — Thu, 04 Apr 2019 01:39:08 GMT

If it was me I wouldn’t cancel the insurance. If an emergency came up, you would end up with thousands if not tens of thousands of dollars more worth of debt.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

LakeLife — Thu, 04 Apr 2019 13:20:41 GMT

That's an amazing benefit! When my ex was in the military I worked for WorldCom, and I got less than $100 a month for denying their medical insurance. $700 would have be fantastic!

I agree that you shouldn't cancel your insurance, because you could end up in a hole bitter than your student loan debt.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

FlaDude — Thu, 04 Apr 2019 14:55:37 GMT

As other posters mentioned, a major reason to have health insurance is not so much to cover routine care, but to protect against unexpected events or diagnoses that can be very expensive. Going without insurance is a gamble that only you can decide if you want to take.

As far as using the reimbursement money for other purposes, here are a couple of things you'd want to check:

Does your company policy require the money to be used for health insurance?
Is the benefit taxed or non-taxed? If it is non-taxed because it is meant to be used for insurance, using it for other purposes could turn it into taxable income.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Thu, 04 Apr 2019 17:01:46 GMT

The thing with medical insurance is you never know when you'd need it, and without one the fees could easily rack up. I agree with the posters above, I would not advise canceling it.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Thu, 04 Apr 2019 18:17:07 GMT

Okay. Good advice. I want to keep the $8,400 in my disposable cash. However, I understand the risk if I cancel my medical insurance. Thank you.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Thu, 04 Apr 2019 18:17:58 GMT

Does your company policy require the money to be used for health insurance? YES
Is the benefit taxed or non-taxed? If it is non-taxed because it is meant to be used for insurance, using it for other purposes could turn it into taxable income. TAXED

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Thu, 04 Apr 2019 18:19:54 GMT

Yes, it is an amazing benefit. I want to "flip it" and use it to pay my student loans, so I can keep the $8400 in my disposable cash. I do understand the risk if I get sick or hurt. Ugh. It is smarter to keep medical coverage. Thank you.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Thu, 04 Apr 2019 18:20:34 GMT

True! Thank you.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

FlaDude — Thu, 04 Apr 2019 18:52:34 GMT

@Anonymous wrote:
Does your company policy require the money to be used for health insurance? YES

So what is the penalty for using the money for something else? If the company finds out do they stop paying the $700/mo? Do the require reimbursement for past amounts paid to you?

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Anonymous — Thu, 04 Apr 2019 19:05:28 GMT

I do not know. However, it could be viewed as theft and cause for termination. So, I should not risk it.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

Lucifer — Wed, 10 Apr 2019 12:02:04 GMT

So many, many reason to just keep the insurance.

So.....keep the insurance.

You may never need it and look back and think - wow, I could have paid this or that and none of it is worth the risk of financial and health related disaster. Look at the stats on the amount of people that have had their lives and credit so terribly impacted by health issues with or without insurance

@Anonymous wrote:
I do not know. However, it could be viewed as theft and cause for termination. So, I should not risk it.

Keep the insurance.

Re: Single Person Finance: Cancel Medical Insurance to repay Student Loans?

MakingProgress — Wed, 10 Apr 2019 15:25:52 GMT

@Anonymous wrote:
Does your company policy require the money to be used for health insurance? YES
Is the benefit taxed or non-taxed? If it is non-taxed because it is meant to be used for insurance, using it for other purposes could turn it into taxable income. TAXED

There is your answer right there. If the company requires you to use it for medical insurance then you are not allowed to use it for anything else.