Everything You Need to Know About Health Insurance for Students

Student Health Insurance Guide

Unless college students have pre-existing medical conditions, few of them give much thought to their healthcare and medical insurance. After all, when you’re young and in good health, there doesn’t seem to be much reason to worry about it.

Unfortunately, though, college students are just as susceptible as adults (if not even more so) to illness, injury, and infection. With poor diet, lack of sleep, and unhealthy habits like excessive drinking and smoking, many are exposed to increased health risks. And accidents, athletic injuries, and sexually transmitted diseases don’t discriminate against age, gender, or race.

So, it’s critical for young adults to take their healthcare seriously and ensure that they have the right type of coverage to keep them protected.

Over 5% of all students (∼1 million) remain uninsured in the US, with the highest rates reported in Texas and North Dakota. If you want to stay on the safe side and get the appropriate coverage, you’ll need to explore your insurance options and choose the one that suits you best.

That can be easier said than done, considering how confusing and overwhelming the US insurance system is. So, take a look at this comprehensive guide and learn the essentials of student health insurance.

Importance of Having Health Insurance as a Student

Although medical insurance can certainly dig into your or your parents’ budgets, it’s a worthwhile investment that’ll help you avoid financial problems should an unforeseen medical problem occur.

Healthcare costs in the US are notoriously high, and a simple fractured bone after a soccer game could end up costing thousands of dollars to treat. More complicated health problems naturally come with heftier price tags, so it’s not surprising that medical expenses are among the top reasons families and individuals file for bankruptcy.

Some of the main reasons why you should have insurance as a student include:

  • Easier coverage of medical expenses;
  • Meeting mandatory college requirements;
  • Access to mental health professionals;
  • More affordable prescription medicine pricing;
  • More frequent preventative medical checkups;
  • Higher risk of athletic injuries that require treatment;
  • Higher risk of STDs that require treatment.

But perhaps the most important reason for obtaining medical insurance as a student is that it will give you peace of mind knowing you’re protected when push comes to shove.

What You Need to Know About the Affordable Care Act (ACA)

Having over a million uninsured undergrads is far from ideal, but the number was much higher before 2010 and the introduction of the Affordable Care Act (ACA) – commonly referred to as Obamacare.

The federal statute primary goals are to:

  • Make health insurance more affordable for low-income individuals;
  • Support innovative medical care delivery methods;
  • Expand the Medicaid program.

In essence, the act was designed to expand insurance access, improve consumer protection, decrease healthcare costs, enhance the quality of care, and highlight the importance of preventative medicine.

The act incorporated the expansion of dependent coverage, requiring plans to include insurance for children and college attendees up to 26 years old. The direct result of this was a significant increase in the number of insured students across the US, which doubled since the introduction of the ACA.

Additionally, due to the Affordable Care Act, we’ve seen a significant increase in employment coverage for undergrads and a significant decrease in the racial coverage gap.

Medical Insurance Options for College Students

Before you take up the first convenient medical coverage, it’s critical to assess your options and analyze what you’re signing up for. You’ll need to consider several key things:

  • Provider network and type of plan;
  • Your premium (how much you’ll pay monthly);
  • Your deductibles (how much you’ll need to pay out of pocket);
  • Co-pay and coinsurance (additional flat fees or percentage costs);
  • Coverage for your regular prescriptions (if applicable).

For undergrads, there are several unique medical coverage options you can choose from.

Parent’s health insurance

As mentioned, college attendees can remain under their parents’ insurance according to the ACA, even if they aren’t listed as tax dependents.

Pros:

  • Usually the most affordable;
  • Parents’ rates might remain unchanged;
  • You don’t need to change your network of healthcare providers.

Cons:

  • Only applicable for students under the age of 26;
  • Difficulty accessing healthcare network if you’re going to an out-of-state college;
  • Any treatments you receive will be shared with the parent.

Your parent has to add you to their insurance plan during the Open Enrollment Period to apply for Parent’s insurance.

Student medical insurance

In most colleges, new undergrads are usually automatically enrolled into the Student Health Insurance plan, although you’ll need to check with your college administration. The coverage will depend on the institution, but it’ll be compliant with the ACA in most instances.

Pros:

  • Accessible to students who have uninsured parents;
  • A viable option for those moving to an out-of-state college;
  • Accessible to those over the age of 26.

Cons:

  • Higher costs;
  • Might offer coverage only for the duration of the academic year, not during the summer.

As mentioned, most colleges will automatically include new enrollees into the Student Health Insurance Plan. To find out more about the application process, you’ll need to check with your chosen college.

Individual plan

If you don’t qualify for your Parent’s plan or Student Insurance, you could purchase an Individual plan in the state you’ll be residing in on the Health Insurance Marketplace.

Pros:

  • Freedom to choose your own plan;
  • Your courage is not dependent on your student status;
  • If you’re within 100% to 400% of the Federal Poverty Line, you could receive tax credits;
  • At least four price levels are available.

Cons:

  • Higher costs than Parent or Student insurance;
  • Some colleges might not accept Individual plans;
  • If you’re a tax dependent, you won’t receive tax credits.

You can apply by signing up on HealthCare.gov. You’ll need to provide proof of income and other personal information.

Medicaid

For those earning less than 133% of the Federal Poverty Level, Medicaid could be the best option. With the Medicaid expansion under the ACA, you could receive free/low-cost insurance that covers full healthcare services.

Pros:

  • The most affordable option for those who qualify;
  • Available for learners over 26 years old;
  • Special eligibility for those with disabilities and those who are pregnant;
  • Limited expenses for those with chronic health issues.

Cons:

  • Cannot access Medicaid if you’re under 26;
  • Some states haven’t yet expanded their Medicaid;
  • Available only to residents of the state where they’re applying;
  • You’ll lose access if you start earning a higher income.

You can apply for this type of health insurance via the ACA Marketplace or your local Medicaid agency. Eligibility requirements can vary by state.

Healthcare Coverage for Recent Grads and Special Status Students

Transitioning to different health insurance types suitable for students is generally easier than transitioning from student insurance to other plans. The medical insurance system is generally seen as more complex for recent grads and exceptional status learners such as those with disabilities or international exchange students. But, you’ll still have a few viable insurance options:

COBRA insurance

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows some graduates to continue using their parent’s insurance for 36 months after their 26th birthday.

Pros:

  • You’ll receive continued coverage after turning 26;
  • Accessible to recent graduates.

Cons:

  • Expensive coverage;
  • Premium can go up to 102%.

It’s not an ideal option, but it could keep you protected until you’ve found a better plan. Your parent will need to notify their insurance company about your desire to apply for the COBRA extension within 60 days of you turning 26.

Catastrophic insurance

Catastrophic insurance offers coverage for medical emergencies that lead to extremely high expenses (including prolonged hospitalization, expensive surgery, and the like).

Pros:

  • The cheapest coverage option;
  • Covers unforeseen medical expenses;
  • Available to those under the age of 30 (or those of any age who cannot afford or qualify for other insurance types).

Cons:

  • Limited coverage;
  • Higher risk for expensive out-of-pocket costs;
  • You’re limited to three primary care office visits annually.

You can apply for Catastrophic insurance via HealthCare.gov or through your state marketplace.

Short-term health insurance

Short-term insurance offers coverage lasting between 30 days and 12 months. It’s usually best reserved for those who are transitioning between insurance types.

Pros:

  • You should be insured within 24 hours of applying;
  • Not very expensive;
  • Flexible coverage terms.

Cons:

  • No available subsidies for premiums;
  • Doesn’t meet ACA’s standards;
  • Might not offer coverage for pre-existing conditions;
  • Doesn’t cover preventative or primary care.

You can purchase short-term insurance plans through a broker or various private insurance companies.

Best Tips for Staying on Top of Your Healthcare Expenses

Although the health insurance system can be confusing, whether you’re a student or not, it’s critical for managing your healthcare expenses. To stay on the safe side and ensure that no medical emergency catches you unprepared, you should also try and follow the next tips:

  • Compare and contrast different providers

Workplace coverage isn’t always the best option, and neither is parent’s insurance. To make sure you’re getting the best value for your money, you should analyze all your insurance options, compare their pricing, and consider any deductibles you might be responsible for.

  • Be on the lookout for billing errors

Billing errors are always possible, and unfortunately, some providers might even make them purposefully. Always ask for an itemized bill that specifies all charges, and examine your bill thoroughly.

  • Use generic prescriptions

Like with any other product, the cost of brand-name prescriptions is typically higher than that of generic prescriptions. Check with your healthcare provider about any generic prescriptions you could use for your condition.

  • Ask for possible over-the-counter alternatives

Over-the-counter medication can at times be significantly cheaper than prescriptions. Consult your doctor about the best over-the-counter alternatives.

  • Create a dedicated health savings account

It never hurts to have savings for a specific purpose, so it would be in your best interest to create a dedicated health savings account. It will help you cover any deductibles you might be responsible for, and it will ensure you get the proper treatments for services your insurance doesn’t cover.

Additional Resources

To learn more about the best insurance plans for students and recent graduates, you might want to check out the following additional resources:

  1. USA.gov – an official US government website that contains all the relevant information regarding insurance, taxes, jobs and unemployment, and more.
  2. US Department of Labor – an official government site dedicated to sharing information relevant to all wage earners, job seekers, and retirees.
  3. Investopedia – a comprehensive website containing detailed descriptions and explanations of all things regarding finances.
  4. Centers for Disease Control and Prevention – a public health agency that contains an abundance of information regarding health and safety.
  5. Healthcare.gov – a health insurance exchange website run by the federal government.
  6. CMS.gov – part of the Department of Health and Human Services where you’ll find information on Medicare, private insurance, and more.
  7. ACHA – a trusted resource with the aim to promote healthy campus communities across the US.

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