This guide compiles information for students of all levels and ages, recent graduates, and parents who claim a student as their dependent. Take the time to navigate your coverage options, costs, and obligations in order to make an informed decision on an insurance plan.
Although going to school is a rewarding experience that prepares you for a better career, life as a student comes with unique financial challenges. Tuition costs are ever increasing while credit card debt and student loans are all too common financial burdens that young people assume in our present economy. As a member of a young, relatively healthy demographic, you may not even be thinking about paying for health coverage.
Being practical and prepared for medical insurance can only help you get through school. Health (including mental health) issues are a leading cause of college dropouts across the country. Without insurance, the costs associated with an unexpected illness, injury, or medical procedure dwarf the tuition or student loans you might have. Even a minor injury can put you in serious financial risk.
Discover Why You Need Health Insurance Now
Young adults (ages 19-29) are the least likely to be insured. They’re also an age group that’s much more likely to visit the hospital emergency room than any other group. An uninsured stay at the hospital due to accident, injury, or unexpected illness can cost you thousands, or even tens of thousands, of dollars. Health insurance can protect you from this liability and potential for bankruptcy or other devastating financial possibilities.
Planning for student health insurance used to be a relatively straightforward process, but with many parents losing their employer-sponsored plans, students now have to research their options. Healthcare costs are escalating dramatically every year, so make sure that you’re prepared by covering yourself and your dependents.
Know the Implications of the Affordable Care Act
In March 2010, the President signed into law the Affordable Care Act, putting comprehensive health insurance reforms into place. Through 2014, the Affordable Care Act will continue to be implemented, increasing access to affordable healthcare for many individuals, families, and businesses. It will also change the marketplace for health insurance. One of the biggest changes is that, starting in January 2014, individuals who qualify will receive financial aid to help them buy their own insurance.
The following changes took effect in September 2010:
- Protection from rate increases
- Protection from canceled insurance
- More coverage for preventive care (checkups, for example)
- No lifetime caps on benefits
You can study these changes in further depth through the government’s health insurance site.
First Things First: Understand Insurance Terminology
Below are some common terms you’ll encounter as you research your choices.
- Premium: the periodic payment required to keep an insurance policy in effect. A plan with a lower premium usually comes attached to a higher deductible, and vice versa.
- Deductible: The portion that you pay before insurance coverage begins. Keep in mind that your monthly premium and co-payments often don’t count toward your deductible.
- Co-insurance: The percentage you pay when your health plan doesn’t cover 100% of your medical costs. You’ll also see co-insurance described as percentage participation, which applies after your specified deductible is met.
- Co-payment (co-pay): Your share of a specific healthcare bill charged at the time of service. For example, you may have a co-pay of $20 when you visit a doctor’s office. If you anticipate visiting the doctor’s office frequently, choose a plan with an affordable and consistent co-payment.
- HMOs: Short for Health Maintenance Organizations. These are organizations that provide or arrange care for insured individuals and groups.
- PPOs: Short for Preferred Provider Organizations. PPOs are managed care organizations of medical doctors, hospitals, clinics, and other healthcare providers that have contracted with insurance providers to provide care at reduced cost.
Explore All Your Insurance Options
Before investing in a potentially expensive independent insurance plan, be sure to explore all your options, including your parents’ plan, school-sponsored plans, non-school-sponsored student plans, insurance through professional associations, Medicaid, state high-risk pools, short-term health insurance, COBRA, low-cost health services, and insurance designed for international students.
Stay on your parents’ health insurance plan
If your parents have an employer-sponsored insurance plan, or another insurance plan that covers children, you are eligible for coverage until the age of 26, thanks to the Affordable Care Act. Staying on your parents’ plan has some major advantages, including convenience, as the billing and claims may already be handled by your parents. You also can’t be declined for coverage because of medical reasons.
You should know, however, that if you go to school in a different state, your coverage levels may be decreased. Your parents’ plan may also be more expensive than other options, such as school-sponsored insurance. Get the most accurate information pertaining to your situation by contacting your parents’ employer or insurance company.
Get coverage from a school-sponsored plan
Colleges and universities around the country understand that students need health insurance to be successful in school. Check with your school to see if it has a health services department or clinic, as well as a student health insurance plan.
Generally, student health insurance plans cover students who are enrolled full time. There are certain advantages to student health plans, too. Designed with students in mind, they tend to be more affordable than other individual insurance plans available on the private market. These plans also let you receive care from campus clinics or hospitals.
However, these school-sponsored plans may not cover medical services rendered off-campus. Particular plans may even restrict benefits. There’s also a big loophole that catches many students who don’t fully understand the terms of their plans: If you drop below a required number of credit hours per term, or withdraw from classes, even if it’s due to health issues like injury or depression)m you may instantly lose your coverage. Check with your school’s student resources office for more information.
Ask about student health insurance plans (non-school-sponsored)
There’s a variety of health insurance plans available to students that are offered from noneducational organizations and providers. Generally, these options are available for full-time students between the ages of 17 and 29 at a state-accredited college or university.
Unlike school-sponsored plans, coverage travels with you if you transfer to a school in a different state. However, these plans may be more expensive than certain individual coverage plans, so be sure to shop around before you commit. You may also need to pay your premium in a large lump-sum amount. Until healthcare reform is completely implemented in 2014, you might still be declined based on medical history. These plans also might not be available in some states, so check with a licensed insurance agent to make sure you’re getting the best deal.
Leverage professional associations
There are plenty of professional and fraternal associations that also offer health insurance to their members, but policies vary between organizations. As an example, undergraduate and graduate students studying archaeology or cultural, linguistic, biological, or forensic anthropology are all eligible to join the American Anthropological Association at a subsidized student rate. As a member, you’ll then be eligible to participate in its health insurance program, which offers services with rates based on your age and other information.
Start by searching for professional organizations based on your subject of study and professional goals. Educate yourself about the provisions of coverage, as well as the costs. Some association plans have a very limited payment schedule, and you’ll still be responsible for all costs associated with the scheduled amount.
Health insurance through Medicaid
In the United States, Medicaid is a program that offers assistance to individuals and families with low income and resources. Although it is jointly funded by state and federal governments, the program is administered by the states. If you are a U.S. citizen or legal permanent resident, have a low family income, are overwhelmed by high medical bills, or have a disability, you may qualify for Medicaid. To determine your eligibility for Medicaid, check with your state’s department of insurance.
The Affordable Care Act will also expand Medicaid eligibility to include all Americans under the age of 65 with incomes up to 133% of the federal poverty level, including adults without dependent children.
Find health coverage through your state’s health insurance pool
Many states have resources available to provide special health coverage plans for certain residents. These people include those who cannot afford health insurance, those who have been denied coverage from a private insurance company, or those who do not qualify for Medicaid. Check this list of states with state and federal high-risk health insurance programs.
Coverage options are generally very similar to traditional health insurance options available on an individual level. While details vary state to state, you’ll find comprehensive major medical plans with a range of deductible options. Most high-risk pools offer coverage of prescription drugs, maternity, mental health, and substance abuse.
Unlike individual student or school-sponsored health insurance programs, these plans do not require you to be enrolled full time to qualify. You’ll be able to maintain coverage under your plan even if you drop to part-time status, take time off from school, or finish your studies.
Short-term health insurance:
With this kind of non-renewable and relatively inexpensive plan, you are provided coverage ranging from 30 days to six months. These plans are advantageous for those transitioning between jobs, those ineligible for COBRA rights, or those visiting a school from another state or country.
COBRA for students
Students who have turned 26 and are no longer eligible for coverage under their parents’ health insurance may be eligible for COBRA. There are other categories that allow individuals to be eligible for temporary coverage, with special rules that apply for extended coverage for disabled students. Check with the U.S. Department of Labor’s website for more information.
Low-cost treatment options
If you find yourself uninsured but still need treatment, try finding a federally community health center near your school. These community health centers exist in both urban and rural areas. They provide care to people without health insurance and offer sliding scale fees (fees that are more affordable for those who can demonstrate they have a low income).
Community health centers offer many of the services offered at other physician’s clinics, like routine physical checkups, triage and treatment of illness, maternity care, immunizations and pediatric care, and assessment and treatment of mental health problems.
States and organizations have different criteria for offering these low-cost treatment options, so you’ll need to contact individual community health centers for accurate information. To determine if you qualify for services, find and contact a community health center near you.
Information for international students
There are student insurance plans written specifically for international students and those who are studying, performing research, or visiting the United States on educational business. Some are also for U.S. students who have planned to live or study abroad during their academic career.
Most schools offer academic and personal advising services for international students, often through an office for international student affairs. If school-sponsored insurance isn’t available for international students, the school may be able to advise you on private insurance options.
The U.S. Department of State (DOS) requires that all Exchange Visitors in J-1 Status maintain insurance for themselves and their dependents while in the United States. It is recommended that students in F-1 status also maintain insurance.
Individual Health Insurance Plans
Everyone is eligible to apply for individual health insurance coverage, including those who have recently graduated, are taking time off from their studies, or are waiting for school to begin. In many states, you’ll have a lot of affordable options with a range of benefits to choose from.
Unlike student health insurance plans offered by some schools, your coverage will continue even if you have to drop classes or take time off from school. However, you can still be declined coverage because of your medical history until the Affordable Care Act is fully in place in 2014.
Discover different types of insurance
You need to understand the difference between catastrophic and comprehensive health insurance plans. It’s an important distinction, because there’s a difference in premiums and coverage, and you may be penalized for pre-existing conditions (like cancer or a serious injury).
- Catastrophic insurance plans generally have lower premiums than comprehensive insurance plans.
- Your deductible per medical occurrence will be higher than that of comprehensive insurance plans.
- If you move to another health insurance plan that has a pre-existing condition waiting period (which is generally nine months), you will be responsible for the entire cost of care for any pre-existing conditions. This can have disastrous financial consequences.
- Comprehensive insurance plans generally have higher premiums than catastrophic insurance plans.
- Your deductible will be less than it would be under a catastrophic insurance plan.
- Your time spent covered under a comprehensive health insurance plan will be credited toward the pre-existing condition waiting period (again, generally up to nine months.) In healthcare, this is called creditable coverage.
You’ll need to consider and decide which out-of-pocket expenses you are willing to pay for your plan. In addition to the monthly premium, you will also need to cover your deductibles and co-insurance and/or co-payments, which may be described as out-of-pocket expenses or cost sharing on your insurance bills and other materials.) HMOs, PPOs, and other traditional fee-for-service insurance plans administer cost sharing policies differently, so be sure to read the fine print before you decide.
Ask yourself the following questions as you consider your options
There’s a myriad of choices and complexities in the health insurance marketplace. By doing your research and answering the following questions, you’ll minimize your chance of overpayment:
- Should I use an HMO or PPO?
- HMOs generally have lower premiums, but fewer choices of medical providers because patients must remain within their network for healthcare. Additionally, special services like MRIs or CT scans have to be approved in advance by the insurance company. You’ll find that your doctor and your insurance provider have to agree on a plan for your healthcare before treatment can be given.
- PPOs provide a greater choice of providers, but have higher premiums. Generally, the doctor is the only person who makes decisions about your healthcare, and preadmission isn’t necessary for special services.
- Is your doctor and hospital of choice in the network?
- Each insurance provider has a different network, so you’ll need to be sure to check your insurer’s website for medical professionals and clinical services that are covered. Inquire which hospitals around your school are in the network.
- Do your research to find an in-network doctor nearby whose philosophy and reputation appeal to you.
- Do you have any medical conditions or specific medical needs? Not all plans cover the same medical issues. Below are just a few of the services that may not be covered by all plans:
- Alcohol and drug treatment
- Annual doctor’s exams
- Emergency room and urgent care visits
- Holistic medicine
- Inpatient care
- Mental Health
- Outpatient hospital care
- Pre-existing conditions
- Prescription drugs
- Do you need an insurance plan that covers you alone, or do you need a plan for you, your spouse or partner, and/or your children? Plans and costs vary considerably based on the number of individuals covered.
- Even if you select private insurance for yourself, your children may be eligible for enrollment.
- Coverage for domestic partners varies depending on provider and the state. Make sure to find out if the program will insure your partner before committing to a plan.
Appealing a health insurance claim
If your health insurer denied you coverage for medical care you have received, you still have the right to appeal the claim and ask that the company reverse the decision. Take advantage of these tips to improve your chances of winning an appeal:
- Review the literature that accompanies your policy and its explanation of benefits.
- Contact the insurance company and keep detailed records of your attempts to contact them (which may include copies of letters, times and dates of conversations in person or on the phone).
- Request documentation from your doctor, employer, or student health practitioners on campus to support your case.
- Write a formal letter that details what care was denied and why you are appealing the decision through the company’s internal review process.
- If your claim fails the internal appeal, you can file a claim with your state’s department of insurance.
Learn from These Case Studies
There is no single solution to health insurance that fits everyone’s financial and health situation. You’ll need to do so some serious reflection about your health habits, your needs, and your (and your parents’) finances before you sign on to an insurance plan. Below are some case studies that demonstrate the kinds of questions you’ll need to ask yourself as you shop for an insurance plan that suits your needs.
Monica is a 20-year-old undergraduate environmental science major. She’s very health- and diet-conscious and rarely gets sick, but she also understands that her favorite activities (rock climbing, base jumping, and spelunking) all carry significant risk of injury. She’s studying at a small school that doesn’t offer its own health plan. Monica should consider the following options:
- Her parents’ plan
- An individual plan with a low premium and higher deductible that doesn’t cover things like prescription medication or maternity benefits. By reading the fine print and finding the right plan, she can save her parents money while having coverage just in case she gets injured.
Bill is a relatively healthy 22 year old from Michigan studying in California at a large state school. He sees the doctor about five times a year, but doesn’t have family resources he can rely on. While his university offers a health coverage plan, it still won’t cover him during breaks or the summer when he returns home. Bill’s options include the following:
- His parents’ plan
- An individual health insurance plan with a low deductible and affordable co-payments that provides out-of-state coverage at an acceptable rate
- An individually purchased student health plan that provides the same level of coverage whether he has to see the doctor in Michigan or California.
Jennifer and Pedro are married and are now both graduate students at a private university in New York City. They’re very healthy and are planning on having children soon. This means they won’t have a lot of extra income, especially because living in the city while making tuition payments is difficult. Their options include the following:
- A university graduate student health plan, after verifying that it provides coverage for maternity care and early childhood care
- A family plan with the same benefits that is comparable in cost to the university’s graduate student health plan, and that will continue to provide coverage once they complete their studies.
Other Helpful Student Health Insurance Resources
- Macalester College: Staying Healthy in College Some practical advice offered by Denise Ward, director of Health and Wellness at Macalester College.
- NY Times: A Maze of Options on Health Insurance for College Students Published in 2009, this article remains relevant as it details concerns for the state of student health insurance.
- USA.gov: Health Insurance This government-sponsored website contains official information about health insurance, with a helpful checklist for appealing a health insurance claim.
- U.S. Department of Labor: Continuation of Coverage (COBRA) This official guide, compiled by the U.S. Department of Labor division of Health Plans & Benefits, contains helpful information to demystify the policies surrounding COBRA and continuation of benefits once you’ve stopped working. It contains links to fact sheets and downloadable brochures.
- U.S. Department of Labor: Frequently Asked Questions about HIPAA Compliance Read through these frequently asked questions about the Health Insurance Portability and Accountability Act, including details about creditable coverage, special enrollments, and exclusion of service based on pre-existing conditions.
- U.S. Department of State: J-1 Visa Be informed about the J-1 visa, which applies to many visiting students from other countries and stipulates rules about maintaining health insurance.