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

[Anonymous]

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.

[Andypanda]

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.

[LakeLife]

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. 

[FlaDude]

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.

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

• 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

[Anonymous]

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.

[Anonymous]

True! Thank you.

[FlaDude]

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@Anonymous wrote:

• Does your company policy require the money to be used for health insurance? YES

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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?