A Complete Study Guide to Student Health Insurance
Once you hit the age of 18, the insurance companies, much like your parents, see you as an adult. You get to pay for yourself. If your parents had added you to their insurance policies, you fell off once you graduated high school. Now you need to figure out your own student health insurance. You’re in luck though because graduating provides you a qualifying event.
What is a qualifying event?
Under the ACA, otherwise known as the Affordable Care Act, you can only purchase health insurance during open enrollment periods unless you experienced a qualifying event that radically changed your life and insurance needs. Examples of these include giving birth to or adopting a baby, losing your job, or graduating from school. Hey, that last one fits your situation.
How Do You Find Insurance?
You might think you could just go get a policy from the same company from which your parents have their insurance, but it is not that simple. You must qualify for insurance. You must apply for it. The ACA created the Health Insurance Marketplace which allows people to easily shop for affordable insurance based upon their income, age, gender, and health. You do not have to shop in the Marketplace. If your school offers a student insurance plan, you can purchase it. It may only provide essential insurance coverage, so you might want to supplement it.
What Qualifying Coverage Means?
Most colleges and universities offer an option that fulfills the minimum aspects of a qualifying health coverage plan. Congress established these factors in the ACA. Since you have obtained the appropriate coverage, you won’t need to pay a penalty.
Your Many Options
You do not have to purchase your university’s student health plan. You can shop the Marketplace instead. You can also purchase both. You can remain on your parents’ insurance if the following three items all apply:
you still reside in the same state as your parents,
you are less than 26 years of age,
you are still a dependent legally.
If you live in a different state from your parents and you remain young enough to stay on their insurance plan, plus you are still their dependent, you could stay on their insurance, but here is the problem. Their health insurance plan might focus its coverage on their state or region. You might not have a local provider available. If you really do not want to have to deal with getting your own insurance plan, you should carefully read your parent’s plan's coverage documents even though this sounds like a snoozer. Adulting can be really boring at times, but you have to do it, so you survive and thrive. The plan documents let you know where the plan has providers.
Sometimes, you reach the age of 26 and you still qualify as a dependent on your parents. Grad school can do that. It can make it simpler to complete your schooling all at once, so you matriculate for your bachelor’s degree, then plow through your Master’s, and maybe you stick around for a Doctorate. Your parents are probably pretty stoked to have a future doctor in the family, so they let you stay on their insurance by claiming you as a dependent. You can still remain on their insurance, but, and this will probably sound odd, you must choose your own, separate plan.
Getting Your Own Policy
Score! You decided to do it yourself. You turned 18 and decided that adulting is totally for you. Okay, but when you apply for your health insurance, you need to fill out your application carefully. If your parents named you as a dependent on their taxes, you need to fill out your health insurance application as such. You indicate that they will still include you in their tax household.
Your parents also have to amend their insurance. On their application update, they will state that although you remain their dependent, you do not need healthcare coverage.
On both applications, yours and theirs, you report the total household income. That means what your parents reported on their last tax return is the number used. They may qualify for a premium tax credit that provides savings. You get to use the same tax credit. This makes the insurance for which you qualify cheaper.
What happens if you change schools mid-year?
Let’s say you purchased your school’s health plan. Now, you changed schools though. You play a sport, and you entered the NCAA transfer portal so you can play at your new school. You know that you really need health insurance because of your activities as a student athlete. You are good to go because you qualify for a Special Enrollment Period. This falls outside of the annual Open Enrollment Period. You can also shop the Marketplace or choose your new school’s student health insurance plan.
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Out There on Your Own
You declared yourself independent whether at 18 or 22 or any adult age. Your application will only reflect your own income. As long as you pay for yourself and declare yourself an independent on your income taxes, you get to claim the same on your medical insurance application. Here’s the caveat: if you are under age 21 and still live with your parents when you aren’t at school, you declare yourself independent on the form, but you still report your parents’ income with yours.
Applying Through the Marketplace
When you visit the Healthcare Marketplace, you will answer a quick quiz that lets the site know which insurance plans to show you. One important one is if you have health coverage. Even if you have the student health plan, you answer "No." You can choose to buy both insurance plans, or you can purchase one from the Marketplace, then drop the student plan. You can own more than one insurance policy. You have many health insurance options.
A Small Warning
Shopping for insurance, especially medical insurance, isn’t like anything you probably did before. Medical insurance costs a lot, and you should prepare yourself for the expense. You can find a few, and we mean one or two, plans that cost less than $100 per month. You should budget for an expense of about $1,200 per year.
Since the passage of the ACA, you must legally carry health insurance or pay a tax penalty. Since college comes with many expenses, you should consider remaining on your parents’ insurance policy as long as you possibly can. The cost of buying your own insurance creates that large of a budget category. While college’s student health plans might not provide much coverage, they do fulfill the minimum needed. They also typically cost less because rather than purchasing individually, your college has cut a deal with the insurance company to provide a group rate. That means that since thousands of students at your school buy the same plan all at once, pooling them together reduces the costs.
The guarantee of so many people paying insurance premiums balances the company’s risk at extending the policies. They offer a group rate on the insurance just as they offer the university a group rate on the medical insurance it offers its employees.
Realize that these policies cover a bare minimum of things. They tailor them to student needs. College students undergo health needs such as flu or sprains, sometimes broken bones.
Health Clinics
Your student health plan typically requires you to seek care at the campus health clinic first. This clinic usually offers an extremely low co-pay. You might fork over $15 or less for a doctor visit.
These clinics usually do not have a hospital component. You will not be able to stay overnight at the campus health center. They will usually have the means to take x-rays and do essential blood work.
Although staffed by doctors and nurses, you will not receive the same level of care as you would at a hospital emergency room. You should check the policy to make sure that it covers the nearest hospital and at least one of the specialty hospitals in the same metro area. The most important type to check for is a trauma center. You could easily become involved in an auto accident and need treatment at a major hospital rather than the campus health center. Double-checking this as soon as you register for the plan lets you know if you will need to supplement it with a Marketplace plan.
When you check the Marketplace and you qualify as an independent, you rely only on your own income. This means if you make very little, you could qualify for Medicaid or the Children's Health Insurance Program (CHIP). Those plans let you immediately begin coverage regardless of whether you apply during an open enrollment period or you undergo a qualifying event.
Who Offers Plans College Students Can Obtain?
Your best bet remains using your student insurance option or going through the healthcare marketplace, but you can also shop around individual companies. Investopedia looked at the possibilities for college students and health insurance. After examining 17 health insurance plans, the site determined the top four companies offering plans for college students. The evaluation criteria included health insurance monthly cost, provider network, and coverage options. This resulted in a short list of starting points:
Aetna,
Cigna,
Everest,
IMG.
According to Investopedia, Cigna offers the best student-suited plans overall while Aetna offers the best plans for low-income students. If you are a student who already declared their independence, unless you happen to be independently wealthy, this means you. Perhaps you’re visiting the US and need to supplement your medical insurance from overseas. Everest provides the best short-term coverage. Considered temporary plans, you can use this type of coverage when you only need a few months of extra health insurance, but they have competition from IMG, which Investopedia deemed the best option for international students.
Cigna
Cigna offers comprehensive coverage and most of their customers receive financial help that lowers their premiums. More than half of their customers pay less than $100 per month. Its plans for students offer free preventative care plus zero cost virtual care, also referred to as e-health. It plans cover pre-existing conditions. You get to pick between an HMO or PPO plan.
Aetna
Aetna provides extremely low-cost catastrophic insurance policies. While these come with super low premiums, they have high monthly deductibles. You will get some preventative services free, plus some primary care visits cost nothing. You will get financial protection for health emergencies, but these plans aren’t available in every state. The company has a superior reputation and earns great ratings through the Better Business Bureau. These plans do not qualify for subsidies, so the premium is up to you.
Everest
Everest can provide you with a short-term health policy that doesn’t force you into a fixed provider network. You also get preventative care through its wellness program. The copays are tiny, and the policies offer coinsurance options, and a free-look period applies. You can choose from multiple coverage periods. You won’t get prescription drug coverage, vision, or dental, and the plans do not cover pre-existing conditions, plus you can’t get them in all US states.
IMG
International students should start their search at IMG which offers tons of plan options. You can find a plan with a low deductible and high maximum limits up to $8 million that you can still afford. Some plans include mental health coverage and maternity coverage. You can customize your policy with multiple add-ons and riders, so your policy works best for you. It automatically includes prescription drug coverage. Your pre-existing condition coverage kicks in 12 months after the policy date begins. The only hitch is that the lower tier plans do not comply with visa requirements for J1 and J2 visas.
Finally,
You can obtain the health insurance you need as a college student. If you do not remain on your parents’ plan, you have a lot to learn really quickly, so you can pick an insurance plan that covers you fully and honors your pre-existing conditions.
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