College Health Insurance
Obtaining insurance as a college student is extremely important. Luckily, many colleges provide plans alongside private providers, creating a market full of consumer choice. Here are a few choices for maintaining health insurance coverage through college, and the pros and cons with each.
Parent's Employer Provided Insurance
Still the most popular form of collegiate insurance is a parent's insurance policy. These policies are the most inexpensive way to remain insured, especially for families with younger children, since the cost is flat rate by employee, employee plus spouse, and employee family plans.
More than two-thirds of college students aged 18-23 remain on their parents' plan and save a considerable amount of cash in the process. Plus, since family insurance plans are usually broad-based and offer lower deductibles and greater coverage, your college student will have lower out of pocket costs and the peace of mind of high quality insurance. This is perhaps the best solution for anyone looking for college coverage provided the family already maintains employer health insurance.
The new health care reform passed by Congress extended the amount of time a student can stay on a parent's insurance by law to 26 years old. This allows for even graduate school students to maintain parental coverage. Keep in mind, however, that going to school is not enough to qualify. Students must maintain full-time (12 credit hour per semester) class loads.
Keep in mind one final consideration: if the insurance requires “in network” doctors and medical providers, a parent's policy may not be suitable if the student lives hundreds of miles from home. While some allow for indemnity, it may come with thicker deductibles and co-pays. Check with your insurance company or human resources department before you leave for school, it may save you a few hundred dollars.
Individual Health Insurance
Purchasing insurance individually means purchasing from a for-profit insurance company with premiums that are not subsidized by an employer or school, making it one of the most expensive options.
The good news, however, is that most college students are low health risks and do not take monthly prescriptions or consume a large amount of health care resources. High deductible insurance policies with limited pharmaceutical coverage cost little more than $80 per month for healthy individuals. Such policies will protect from high cost medical care, particularly hospitalization should it be necessary. With some luck, and higher premiums, routine doctor visits may be covered, but expect larger co-pays for each visit, annual deductibles, and annual caps.
Do consider your own health before going it alone. Private health insurance is very different from a group policy where nearly everyone is accepted. With private insurance, someone with pre-existing conditions may be denied, or priced out of the system with extreme monthly premiums.
School insurance policies were first created as a way to better tie good healthy habits to college students and help reduce the spread of diseases and viruses throughout the student community. As a result, school sponsored insurance is usually bare bones, meant only to protect students from mostly routine expenditures.
A number of universities now offer insurance directly to their students, creating a group among their student body and reducing overall health insurance premiums and costs. These popular insurance options are inexpensive, and may cost little more than a few hundred dollars per year.
There are serious consequences to such low premiums. Due to the low cost, college sponsored plans often cap payouts at $40,000 per incident, and in many cases have universal caps. Thus, a long hospitalization requiring a few days in intensive care easily extends in price well above the cap, leaving the student burdened with huge medical expenses.
Other common caps include routine medical care caps, which can be as low as $1000 annually. Anyone who has recently been to the doctor will be able to tell you that a few visits to a family doctor or specialist will easily breach the $1000 cap.