The Best Affordable Health Insurance for College Students
If you are, or are going to be a college student, you have many options when it comes to getting health insurance coverage while keeping costs low.
You may think that as a college-bound young adult the health insurance options that are available to you before and after you arrive on campus are pretty limited.
The fact is that students have a number of choices when it comes to covering their healthcare needs.
Here is what you need to know about the six most common options:
Stay on your parents' policy
Ever since the Affordable Care Act passed into law in 2010, children have been able to stay on or be added to their parents' health insurance plans until they turn 26.
Assuming their parents' plan offers dependent coverage, that is. Not all plans do, and the federal government currently doesn't require it. That said, the majority of group plans available today provide this kind of coverage.
If your parents' plan does cover dependents, though, you can be kept on or added to it even if you're:
- Living on your own
- Eligible to enroll in your employer’s plan
- Not financially dependent on your parents
There's one potential pitfall for young people who stay on their parents' health insurance and go away to college. If they attend an out-of-state school, there may not be any in-network care providers for them to see on or near campus. So, you or your parents may want to ask the insurer about this before classes begin. (You also may want to ask how the company deals with out-of-state emergency care—just in case you ever need to make use of that kind of service.)
One way some families get around this problem is by scheduling routine preventative care visits during breaks from school or vacation periods. That way their children can still access in-network physicians and specialists on a regular basis.
Take advantage of a school-sponsored plan
If being added to or remaining on a parent's health insurance policy isn't an option for you, consider signing up for a plan offered through your college or university.
The catch here is that not all schools make health plans available to students, although a good number of them do. Also, not all plans offered in this way are created equal. Some are offered directly through the school, which handles (and pays) any claims that may be made. But others are offered in partnership with an insurance company, with the latter entity handling claims and the like.
One of the most appealing aspects of school-sponsored health plans is that they're usually combined with a student's other education-related costs. So student loans can be used to cover them.
Something to keep an eye out for if you find yourself pondering one of these plans: some offer coverage that is more limited than what you might get elsewhere. So, read the fine print and make sure you're OK with everything that's included in it (or isn't included in it) before you make a final decision.
Note: in most cases, if you're covered by a school's health plan, you're also covered under the Affordable Care Act. This means you won't have to pay the penalties people without coverage are charged. That said, don't assume this is true; if you have to, check with a representative at your school to make sure their health plan meets the government's minimum requirements.
Purchase a policy through the government's "marketplace"
For some students, buying health insurance through the federal or state "exchanges" will make more financial sense than getting it through their school or staying on their parents' plan.
Depending on your situation, you may could qualify for lower monthly premiums, tax credits, or other savings if your annual income is below a certain threshold. (The government even provides a handy "Quick Check" chart that can be used for this purpose at Income levels that qualify for lower health coverage costs.)
Buy a "catastrophic" plan
Anyone under the age of 30 can buy "catastrophic" health plans if they don't want any of the health insurance types mentioned on this page.
A major benefit of these policies is that they usually offer young adults lower premiums than other health insurance policies they're likely to come across. That lower initial price tag comes at a cost, though, as these policies also usually offer higher-than-normal deductibles.
While the majority of “catastrophic” plans do not cover routine care, some do allow policyholders to visit physicians for preventative assessments and care at no cost. You definitely don't want to assume that will be true of every policy of this type, though, so don't be shy about asking your agent what a plan includes.
Even if a catastrophic plan forces you to pay for these visits out of your own pocket, it still can be worth it. These plans protect you from the sky-high costs that tend to follow in the wake of serious accidents and illnesses.
Make use of Medicaid
Before Obamacare, only a small percentage of the population was able to access health insurance via Medicaid. Medicaid is the state and federal program that provides coverage to those with limited incomes, disabilities, or who find themselves in certain family situations.
Now, though, states can expand their Medicaid programs to cover adults under the age of 65 and whose annual income is up to 133 percent of the federal poverty level. Twenty-six states have already expanded or are in the process of expanding their offerings. So if you live in one of them you might want to consider Medicaid if none of the other possibilities included here will work for you. Find out which states are involved in the Medicaid expansion & what it means for you)
If you're confused as to whether or not you qualify for Medicaid coverage it can't hurt to apply and see what happens. In fact, that's basically what the government suggests people do.
And if you don't qualify? Consider one of the options mentioned above, such as buying a private plan through the federal or state exchanges, or purchasing a so-called catastrophic plan.
Skip health insurance altogether
If any of the options discussed here should be considered a last resort, this is it.
If you can't afford any of the policy types detailed above and you're not eligible for Medicaid, you could probably ignore health insurance without penalty.
(The Affordable Care Act requires most Americans to have "qualifying health coverage." Only those who are single, under 65, and make less than $10,000 a year can ignore that rule without being penalized.)
If you're a college student, or you'll be one soon, check out our article about "College Students and Car Insurance."
Frequently Asked Questions
Q: Does health insurance exist that's specifically for college students?
A: Yes, many colleges and universities offer students health plans. These plans feature various amounts and kinds of coverage.
Q: What happens if I decide to stay on my parents' health insurance plan, but while I'm on it I turn 26?
A: Unfortunately, this "under-26" coverage that was made possible by Obamacare ends on your 26th birthday—no ifs, ands, or buts. You have several options if you're forced off your parents' policy. First, if "Open Enrollment" for the year has ended, you'll still be able to shop for health insurance through an exchange thanks to a "Special Enrollment Period." Also, you may be eligible for premium tax credits and other savings based on your income, so be sure to check into them as you review your options.
Q: Do my parents have to keep me on their health plan if I'm under 26?
A: No, they don't. If your parents decide to take you off of their policy, that doesn't mean you're out of luck in terms of obtaining health coverage. In that situation, you'd have the same options as anyone else who lacks health insurance. This means you could look into most of the other offerings detailed earlier in this article.
Q: I'm under 26, but I'm not a dependent. What are my options?
A: HealthCare.gov says that if you're under 26 but aren't a dependent for your parents' tax purposes, you should apply for health insurance on your own. But at the same time apply for a tax credit.
Q: My parents' health plan doesn't cover dependents. What am I supposed to do now?
A: If your parents' plan doesn't extend its coverage to dependents, it means they won't be able to add you to or keep you on their insurance. So you'll have to find coverage on your own.
Are you looking to insure a college-bound student? Get a quote and compare health insurance plans from top companies to compare rates so that you can keep health insurance costs down.
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