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.

[Adkins]

No, I wouldn't for a couple of reasons. First, the funds have been delegated to cover your insurance. Your company may/could demand repayment of the money since it wasn't used as intended. Secondly, you may only go to the doctor a few times a year but if you had a.major medical event, for example cancer, could you cover the cost of treatment out of pocket? 

[Anonymous]

Are the student loans federal or private?
If they're federal I can help you to see if you can lower your payments. If it's private, there are a few lenders that have options available to lower your payments.
There might also be a way to set aside pre-tax dollars to pay for educational expenses (including student loans?). I'm not familiar with them but you could find out what options your company offers or if something like an IRA could be of benefit to you.

[Anonymous]

Do not cancel medical insurance and continue to accept reimbursement.  That is theft.  Your company would be within their rights to fire you and sue you for back pay.

[Anonymous]

Good advice! Thank you.

[Anonymous]

The loans are Federal. My company offers nothing for educational expenses.

[Anonymous]

Excellent points! Adulting is hard.

[Anonymous]

Federal, that's great! There are many options.
The more details you can provide about your loans, the better ( current/ original balances, types, how long you've been paying on them, repayment plan, etc.).
There are several different Income-driven repayment (IDR) plans that may be able to lower your payments. REPAYE and Income-based repayment (IBR) tend to be the most popular. If you have a significant $ amount of loans, many people find loan forgiveness helpful. If you work in public service, this can often be reduced to 10 years (on a majority IDR plan). Or you can plan to pay off the loan in the long-run, but seek to just get your payments down for now.


To start, here is a helpful resource: repayment estimator. This will give you a rough estimate of what your monthly payments can be. If you sign in (it's the gov student loan website) it will fill in your loan information for you. Ignore the upper number in the range of payments throughout the loan if you don't get annual raises.

https://studentloans.gov/myDirectLoan/repaymentEstimator.action

Students are put on standard repayment by default, but it's rarely the plan most people can afford.
I looked it up and it seems you can only deduct funds from an IRA without penalty for current educational expenses. Sorry about that

[Anonymous]

HECK NO! Find another way to lower the costs.

Accidents, sudden illness, nobody is immune.

My personal story: Was married living my best life with my husband. He was healthy, played D1 college football but had to retire early due to knee problems, had a great paying job.. me..I played college volleyball and was in great shape. We traveled the world

In the SAME YEAR my husband got diagnosed with Leukemia and I had a heart attack and then a sudden cardiac death. No Risk Factors.
Now I've pretty much lost everything and we had insurance at the beginning.
Once we were sick enough to not be able to afford our insurance all hell broke lose.
Can you pay out of pocket $300k for a bone marrow transplant
19k for a 4 day hospital stay
18k for a ONE day stay
50k for 5 weeks in the ICU
No? Neither can I but thats my reality right now. If you need me to send those bills I can.
And to add insult to injury we spent our savings on my husbands treatments and he still died.
I have one foot in the grave myself with a barely functioning heart and there is very little help out there. All this transpired in ONE year. Did I think this could happen....nope...I'll never say never again.
So sorry for the dramatics but DO NOT GO without HEALTH insurance. I yelled for the people in the back to hear!!!

[Anonymous]

Deznelle,

I am so sorry you lost your husband, your savings, and your health. And in such a short period of time too!  You've had a terrible year.  I hope things start to look up for you. I agree that going without medical insurance can be devastating in many ways.

For the OP, I knew someone who went without health insurance due to cost, then had some ER visits for previously undetected health issues so they went on their spouse's insurance through work. During the waiting period before it kicked in, this person sustained an injury that required surgery, which took place...less than a week before their coverage would start.  The surgery and hospital stay were over $70,000.  Healthcare in the U.S. is extremely expensive.  And since the money your job gives you is allocated for insurance reimbursement, spending it otherwise is fraudulent and not a good idea.