Student Guide to Health Insurance Plans
What to Choose and Why
Good health is one of those things we all take for granted – it’s only when we get sick that we remember just how important being healthy really is. When a person’s health takes a turn for the worse, it can not only be worrisome, but also quite expensive. That’s why health insurance is so important. The insurance provides a safety net that prevents financial ruin when a person must receive high-dollar medical treatment. But it also provides for preventative care, which is one of the most important aspects of staying healthy through life.
Having health insurance is important, but getting it isn’t always easy. Though the Affordable Care Act (ACA) paved the way for millions to get more affordable health coverage, today’s political climate means potential big changes to this valuable program and others that provide coverage for those in the U.S. This guide will provide an overview of the health insurance market in the United States, specifically for students, those who support students, or recent graduates who are curious about what it takes to get healthcare coverage.
Affordable Health Insurance Choices for College Students
College students have several sources for health insurance. So many choices means the opportunity to save money, but it can also make things a bit confusing. Here’s what students need to know.
How to Qualify: If a parent has health insurance that covers dependents, most students should be able to remain on their parent’s plan until the age of 26.
How to Sign Up: Parents can add their children to their health insurance plan during open or special enrollment periods.
How it Works: Even after the child turns 18, gets a job, moves out or gets married, they can remain on the parents’ plan up to age 26 (in most cases).
Why It’s Good: The cost to add a child to a parent’s plan is usually cheaper than the child getting a plan of their own. It also promotes continuity of care by making it easier for the child to continue seeing their current medical professional.
How to Make it Affordable: Getting insurance through a parent’s plan is one of the best values for health insurance. If cost is an issue, deductibles and other benefits can be adjusted during open enrollment to help save money.
What to Know: If the student attends school out of state or far away from home, it may be difficult to obtain in-network medical care. This means a student may only be able to see a doctor for routine medical care when they are home during breaks. And if the parent loses coverage, so does the child.
Student Health Insurance Plan
How to Qualify: With rare exceptions, any student accepted to the school will be eligible.
How to Sign Up: Because having health insurance is often a condition of being a student, enrollment is may be automatic, but some schools offer information on coverage with their acceptance packets. Students can actively opt out by proving they have coverage elsewhere.
How it Works: Most student plans will require them to see medical professionals on-campus (at the student health clinic) or within the local area.
Why It’s Good: It’s a fairly good way to obtain minimum essential coverage for a reasonable price.
How to Make it Affordable: Students might be able to use financial aid to help pay for the cost of the insurance.
What to Know: Depending on the plan, students may only be covered during the school year. And even if there’s coverage when class is out of session, seeing a doctor back home may be considered out-of-network. Thanks to HIPAA, students who get their health insurance through the school will have their bills and explanation of benefits sent directly to them, giving them medical privacy.
How to Qualify: Though rules vary from one employer to another, coverage is generally only available to those who work full-time.
How to Sign Up: During the orientation process, a human resources officer will explain the sign up process. It’s usually just filling out a simple form or two.
How it Works: The specifics will vary depending on the plan and options chosen by the employer. However, workers can expect to pay co-pays, meet a deductible and pay premiums through automatic deductions from their paycheck.
Why It’s Good: Depending on the employer, getting health insurance through work can provide the best coverage for the lowest price. Even when workers can obtain insurance coverage from other sources for a comparable price, the benefits are usually less.
How to Make it Affordable: Most employers allow employees to choose their coverage, such as dental, vision or adding a dependent. But even with the cheapest options, working students might be better off getting coverage through a parent or spouse instead.
What to Know: Even though a student may be able to get continuing coverage after losing their job (thanks to COBRA), it is often at a very high cost when compared to other options. Additionally, it can be difficult for a student to focus on academics while working full-time.
Affordable Care Act/Healthcare Marketplace
How to Qualify: Almost anyone will qualify for coverage through the Marketplace.
How to Sign Up: Sign up usually takes place during an open enrollment period. If a student misses this opportunity, they can sign up during a special enrollment period. This requires a qualifying event, such as losing prior health insurance coverage.
How it Works: Applicants obtain coverage by shopping at their Health Insurance Marketplace (sometimes referred to as health insurance exchanges), whether run by the state or federal government. If they qualify, students may be able to receive federal subsidies (also known as premium tax credits) to help pay their monthly premiums. Eligibility for these subsidies, as well as the subsidy amount, will depend on income level and family size.
Why It’s Good: Many plans available through the Marketplace will be the same as one purchased directly from the health insurance company; purchasing through the Marketplace allows the opportunity for subsidies. Every plan offered through the Marketplace will provide minimum essential coverage.
How to Make it Affordable: Most Marketplaces will have several tiers of insurance coverage, such as Bronze, Silver, Gold and Platinum. The Bronze plans are cheaper in that they have lowest monthly premiums, but usually higher deductible and out of pocket maximums.
What to Know: Getting a subsidy by purchasing a plan through a Health Insurance Marketplace may require additional paperwork to prove the student’s financial situation. And if that financial situation changes, their subsidy could change along with it.
How to Qualify: The exact qualifications depend on the student’s state. In some states, students can qualify based on income requirements. But in other states, students may need to meet additional qualifications, such as family size or disability.
How to Sign Up: Start with creating an account at healthcare.gov. After providing relevant information, the website will determine if the student is eligible and if so, refer the student to the state agency that administers Medicaid. From there, the agency will contact the student for enrollment. Alternatively, the student can contact the state’s Medicaid agency directly.
How it Works: Medicaid is a state run, federally funded healthcare program for those in need. Each state can decide how they want to administer Medicaid and who may be eligible for it.
Why It’s Good: Medicaid may provide free or extremely low cost healthcare.
How to Make it Affordable: Medicaid can have some stringent eligibility requirements. Because some states make it easier to obtain Medicaid coverage than others, students with significant health needs might choose to attend school in a state with expanded Medicaid coverage.
What to Know: Medicaid benefits and availability are strongly tied to the state. Where the student goes to school and lives can greatly affect the cost of healthcare through Medicaid, as well as eligibility.
How to Qualify: Applicants must be less than 30 years of age or qualify for a hardship or affordability exemption.
How to Sign Up: That depends on the state, but coverage can usually be obtained through the Health Insurance Marketplace or the insurance company.
How it Works: Catastrophic plans provide similar benefits to plans available through the Marketplace or otherwise meet minimum essential coverage requirements. However, insured are limited to three primary care visits per year.
Why It’s Good: Monthly premiums are much lower than other health insurance plans, but the policies provide the same essential health benefits found in other plans.
How to Make it Affordable: As long as the student only needs is an annual physical and routine check-ups, then getting a catastrophic plans can be a good deal.
What to Know: Choosing one of these plans makes a person ineligible for subsidies to cover the premiums. The deductible is usually quite high, meaning the patient pays out-of-pocket for routine care.
Short-Term Health Insurance
How to Qualify: Most people qualify for short-term health insurance. But because insurance companies have far fewer restrictions in what coverage they must include in short-term health insurance plans, many people who apply may not be offered coverage.
How to Sign Up: Students can go through an intermediary, like a broker, or purchase a policy directly from the insurance company. But keep in mind that some states don’t allow short-term health coverage.
How it Works: As its name implies, short-term health insurance provides coverage for a short period of time. Policies can last up to a year with the option to renew.
Why It’s Good: Compared to health insurance plans that comply with the Affordable Care Act, short-term health insurance is a lot cheaper.
How to Make it Affordable: Because insurance companies can adjust the cost of short-term health insurance policies based on the insured’s health status, the healthier an individual is, the lower their premiums will be.
What to Know: Most short-term health insurance plans do not cover maternity care, prescription medications, substance-abuse treatment or mental health care. Those with pre-existing conditions can be charged a higher rate or denied altogether; there are also limits on how much the policy will pay out for medical expenses.
You Should Know: Changes to the ACA
- Though the Affordable Care Act is still law as of this writing, some changes have taken place since its implementation. One of the biggest aspects of the Affordable Care Act was the requirement that everyone obtains health insurance or pays a fee, called the Individual Shared Responsibility Payment (also known as the individual mandate, tax or penalty). But starting with the 2019 calendar year, individuals who choose not to obtain health insurance coverage no longer have to pay this fee.
- Another key change is that in earlier years, applicants had until January or February of the new year to sign up for coverage. But for the 2019 calendar year, open enrollment ends on December 15.
To learn about additional changes which may occur, refer to healthcare.gov for the most current information.
Making Health Care Affordable in College
In addition to purchasing a health insurance plan that provides minimum essential coverage, there are a few things students can do to keep their healthcare costs as low as possible.
- Get coverage through an employer. This often requires full-time employment, but some employers may provide coverage for part-time employees. For some, it might be worth taking a certain job solely for the health insurance benefits.
- Find in-network providers. Even the most expensive health insurance policies will usually provide better coverage when staying in network.
- Get medical care through the school. Most schools have student health centers that provide free or low-cost medical care. For instance, getting an STD screening or immunization might be free or cheaper on campus than anywhere else.
- Ask for generic and sample prescriptions. Save money on medications by asking for free samples. Have to pay for it? See if a generic version of the medication is available.
- Use pharmaceutical discount cards. Discount or savings cards can be used with or without prescription coverage and can easily save more than 50 percent on certain medications.
- Shop around for doctors. For medical services, especially routine care, request pricing upfront. This provides an idea as to what they can expect to pay. (Keep in mind that some doctors will refuse to provide this information.)
- Consider urgent care clinics. Emergency room visits are expensive, even with good insurance. Unless it’s a true emergency, try the urgent care clinic. A basic visit to get an x-ray for a possible sprain or broken bone will be a lot less expensive than an x-ray in the emergency room.
- Shop around for medications. Just like with many other products and services, the cost of prescription medications can vary among pharmacies, even those right next to each other. Before choosing a pharmacy, call and ask what they charge for a particular medication.
- Stay on a parent’s health insurance plan. College students (less than 26 years of age) should try to stay on a parent’s plan. In tight financial situations, students can offer to pay their portion of the monthly premiums – even this will be much cheaper than getting insurance on their own.
Answers to Your Most Crucial Student Health Insurance Questions
What kind of health insurance do most students use?
Most college students obtain health insurance coverage through their parents or from their school. This makes sense for several reasons, including the ease of obtaining the coverage and relatively low cost of premiums.
Am I required to be insured?
Probably. Most postsecondary institutions require incoming students to have some form of health coverage. Many schools will automatically enroll students in the school’s health insurance plan unless the student proactively opts out and provides proof that they have obtained coverage from another source.
Can college students get free health insurance?
Most of the time, health insurance will be “free” because it’s paid for with a scholarship or grant or because parents provide the coverage. Some college students may be able to obtain coverage at no cost to them by getting it through Medicaid or qualifying for subsidies that equal the cost of the monthly premiums of a policy purchased through the Health Insurance Marketplace.
Why do I need health insurance?
The cost of medical care in the United States is exorbitantly expensive. A simple visit to the emergency room can cost thousands of dollars. And if the student is admitted to a hospital for treatment, the medical bill can easily exceed the cost of a full year of tuition, room and board from a private university. Health insurance can reduce or eliminate these expenses.
Do you have to be a student to stay on your parents insurance?
No, at least with respect to plans obtained through the Marketplace. In most situations, as long as the student is less than 26 years of age, they can stay on a parent’s health insurance plan.
Health Insurance Definitions
- Catastrophic Health Plan: These are available to those 30 years of age or younger, or those who garner an exception. Until the deductible is met, an insured can expect to pay for 100 percent of healthcare costs except for three primary care visits per year. For the most part, premiums will be less, but co-payments, deductibles and co-insurance will be higher than minimum essential coverage plans.
- Co-pay: The cost the insured must pay for covered services after meeting the deductible. This is similar to a co-insurance payment, except a co-payment is a set dollar amount rather than a percentage.
- Explanation of Benefits (EOB): A letter the insurance company sends to an insured explaining the cost of the medical services they received, how much they were covered, any adjustments (if applicable) and how much the insured will have to pay.
- Out-of-pocket: The actual amount of money an insured must pay for medical care that isn’t covered by insurance. Examples of out-of-pocket costs include co-pays, deductibles and non-covered medical care.
- Premium: The cost for health insurance. Most policies have month-to-month premiums.
- Co-insurance: This is the amount of money an insured must pay after meeting the plan’s deductible. The amount of a co-insurance payment is a percentage of the overall medical cost.
- Deductible: The amount of money an insured must pay out of pocket before the insurance plan starts to pay for covered benefits. Higher deductible plans generally have lower monthly premiums.
- In-network/out-of-network: Health insurance companies negotiate with healthcare providers to set the prices and/or terms of the medical services offered. These healthcare providers are considered “in-network,” while those who the health insurance companies have no relationship with are “out-of-network.” Some insurance plans only cover visits to network providers; others require a much higher payment when visiting an out-of-network physician.
- Minimum essential coverage (MEC): Also known as qualifying health coverage, a health insurance policy that meets federal mandates with respect to coverage will provide MEC.
- Subsidy: Also known as a “premium tax credit,” a subsidy is the amount of money the federal government pays to help certain individuals (such as those who meet specific income thresholds) pay for health insurance premiums.
How to Use Your Health Insurance
The time has come to get health insurance. But how do you use your benefits? This guide looks at the basics on how to use that health insurance to obtain the necessary care for the most affordable cost.
Pay attention to deadlines. Unless a qualifying event should occur (and these are often unexpected, like losing health insurance coverage), students can only apply for health insurance during open enrollment. Once that window passes, obtaining insurance becomes more difficult and more expensive.
When going to the doctor or pharmacy, students should bring their health insurance card with them. Besides most doctors requiring proof of insurance before seeing a new patient, this will also save time – the information on the insurance card is essential for the medical facility to get the ball rolling for insurance company payment.
Always pay premiums on time. Losing coverage can make life quite difficult; few things will result in a loss in loss of coverage faster than not paying for premiums in a timely manner.
Find a primary care physician. Before seeing a specialist or getting anything beyond basic, routine or emergency medical care, a referral is likely required. In most situations, this referral comes from a primary care physician. This physician should be in-network to ensure medical services obtained are covered by the policy and for the lowest price possible.
Find a pharmacy that accepts the insurance. Not all pharmacies accept all types of health insurance plans. Luckily, most college and university towns will have several pharmacies to choose from. If a policy requires only specific pharmacies – such as those within the student’s home state – the insured will need to make arrangements to obtain prescription medications during visits home or via mail order.
Carefully read Explanation of Benefits letters. These letters will explain what’s covered, what’s paid for and what the student will need to pay. If there are any errors, immediately call the insurance company or medical facility that generated the bill. Some students might be surprised to learn that insurance companies commonly deny covered medical services.
Hold onto all billing related paperwork. If there’s ever a dispute about coverage, billing medical records will be very important when filing an appeal or getting answers as to why a specific medical visit wasn’t paid for. There are other reasons to hold onto it, such as keeping up with the deductible or out-of-pocket limit, or the possibility of using high medical bills as a tax deduction.
Get routine preventative care. Any health insurance plan that meets the requirements of the Affordable Care Act will allow for preventative care, such as physicals and pap smears, at no cost to the student.
Those who want specific information about women’s healthcare in college should check out the following guide.
Prevention is the best way to stay healthy. One of the best forms of preventative healthcare is to get vaccinated. Learn more from the following guide.
College tuition rates get a lot of attention, but another major portion of college costs includes the cost of living arrangements, especially off campus. To discover more about how to protect personal property, check out this guide on renter’s insurance.
Student Health Insurance from the Expert
Hector De La Torre is the Executive Director of the Transamerica Center for Health Studies, a nonprofit focused on helping consumers and businesses navigate the health care landscape. De La Torre was chosen to lead this new initiative because of his private and public sector experience, particularly his leadership role on health care and advocating for consumers and businesses. Among his accomplishments as an elected official were expanding access to doctors in underserved communities, consumer protections against retroactive cancellation of health insurance, and supporting facilities improvements at Children’s Hospitals.
How can students choose the best insurance for their health care needs?
First, students should think about where they live and where they are going to get care. A student that stays on their parents’ plan and goes to school out-of-state could face higher costs when accessing care because they will be out-of-network for that local health coverage. On the other hand, if students want to keep their family doctor, staying on their parents plan and getting check-ups during breaks from school is an option. Find out if your parents’ plan has hospitals near your school for any needed emergency care.
SHIP plans are often a good option for full-time students because many SHIP plans allow the student to get care right on campus or with providers affiliated with the school. Four-year schools are more likely to offer SHIPs than two-year schools, and the coverage is often included in the regular schedule of tuition and fees students pay at the beginning of each semester. Most schools enroll students into their SHIP and require that students opt-out if they want to get coverage elsewhere.
What steps are involved when students obtain insurance?
Many full-time students will be automatically enrolled in the SHIP plan at their school. Once the student is enrolled at the school, they are typically auto-enrolled in the SHIP plan and pay for it when they pay tuition and fees. They then receive an insurance card and description of benefits from the school. Students may opt-out of that plan, which often requires them to show proof of alternative health insurance to the school. If students do opt-out of a SHIP plan, they can enroll in private insurance, stay on their parents plan until age 26, apply for a government plan either through an Exchange or Medicaid, or buy a plan in the traditional insurance market. If you are opting out, make sure you know when the deadline is because it is often early in the semester or quarter.
What mistakes do college students make when obtaining insurance and how can they be avoided?
One mistake is thinking they do not have coverage. Many students will be automatically enrolled in a SHIP plan through their college or university and have access to the school’s health care providers.
Another mistake is not using the health plan that they do have. Students, like everyone else, should get yearly checkups and not think of insurance as something they use only when they are sick. Many preventive services are free.
What are the most important things that students should keep in mind when getting insurance?
They should keep in mind that they are required to have coverage, have many options for obtaining coverage, and should use any the free services offered to them.
If buying a plan, think about your monthly premium and your out-of-pocket expenses. Your premium is the amount you pay for insurance every month and your out-of-pocket is the amount you have to pay when you go to see your doctor, caregiver, or go to the hospital. Often the higher the premium, the lower the out-of-pocket costs you have and vice versa. Think about how often you use care or the cost of prescription drugs you will be taking and pick a plan that covers your needs.
When using care, check if the provider you are seeing accepts your insurance. There is a price difference between “in-network” and “out-of -network” health care providers. If the doctor, hospital, or health care facility you visit is part of your insurance company’s network, you will get your health care at lower prices.
Lastly, take advantage of the mental health services offered. College students today report experiencing anxiety and depression at much higher rates than previous generations. Eating disorders and substance abuse also affect many college students at much higher rates than other groups. The good news is that mental health services are much more available. Services include behavioral health treatment, such as psychotherapy and counseling and may include mental and behavioral health inpatient services and substance use disorder treatment. Additionally, many colleges provide on-campus mental health services to their students at no cost. Some examples of these services include: peer support groups, counseling centers, counseling hotlines, stress relieving programs, and social activities.
- CMS.gov: The Centers for Medicare & Medicaid Services provides a wealth of information on healthcare in the United States, including Medicaid, CHIP and private insurance.
- Families USA: An organization that works to improve everyone’s access to healthcare in the United States; the site has a host of up-to-the-minute news about the Affordable Care Act.
- @HealthCareGov: The official Twitter page of healthcare.gov provides advice on getting health insurance and staying healthy.
- Healthcare.gov: The go-to site for information about health insurance plans available for purchase through the Health Insurance Marketplace.
- Indian Health Services: Despite some differences in how the law treats American Indians and Alaska Natives, the Affordable Care Act still affects them. Students who identify as one of these groups may find useful information here to better understand their healthcare options.
- Consumer Reports’ Guide to Health Insurance: Consumer Reports may be known for objective reviews on products, but their advice also covers health insurance, including how to purchase a plan and getting the most recent information concerning changes to the Affordable Care Act.
- Health Insurance Marketplace Calculator: Provided by the Henry J. Kaiser Family Foundation, this calculator can help individuals figure out exactly how much their health insurance will cost based on their unique set of circumstances.
- Health Resources & Services Administration (HRSA) – Women’s Preventative Services Guidelines: The HRSA provides a good outline of how the Affordable Care Act makes it easier for women to obtain preventative care.
- HHS.gov – About the ACA: The US Department of Health and Human Services offers a series of pages that explain the ACA and how health insurance works, including a page specifically for health insurance for young adults.
- IRS – Affordable Care Act: Tax law and the ACA go hand-in-hand. Those looking to get a better understanding of how they relate can read what the Internal Revenue Service has to say about subsidies and how healthcare costs can affect an individual’s tax bill.
- Obamacarefact.com: A broad, yet detailed explanation of “Obamacare” (the colloquial name for the Affordable Care Act), including how it works, recent changes and how to enroll.
- TeensHealth – Health Insurance Basics: An excellent source of health information for teens and their parents. It also has a guide explaining how health insurance works in very easy-to-understand language.
- Travel.State.Gov – Insurance Provider for Overseas Coverage: College is a great time for studying abroad. This US Department of State website will help explain how students abroad can maintain their health insurance coverage.
- US Department of Labor – COBRA: Includes detailed information about the Consolidated Omnibus Budget Reconciliation Act, which allows former employees to continue their employer-sponsored health insurance plan.
- USA.gov – Health Insurance: Plenty of information about health insurance and related topics, include CHIP, COBRA, Medicare and Medicaid.
- Healthinsurance.org: Find a great deal of information about health insurance here, especially policies created as a result of the Affordable Care Act.
- US Department of Veterans Affairs – VA, Affordable Care Act and You: More and more college students are former service members. Here they can learn more about how the Affordable Care Act affects their ability to get continued healthcare insurance coverage.
- US Department of Labor – Affordable Care Act – Information for Workers and Families: Most people receive health insurance coverage through their employer. The US Department of Labor explains how the Affordable Care Act affects employer-sponsored plans.
- WebMD – Health Insurance and Medicare: This is a detailed section on health insurance, including the basic concepts and how to find a plan.
- Medicaid.gov: The official website of the US government’s Medicaid program.
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