Key Points:
- Many college students still incur injuries and illnesses that may require expensive treatment.
- The college/university plan may not be adequate for your student.
- It’s not always best to keep the student on the parents’ plan.
- Getting the student his or her own plan is often a great solution.
- Consider health sharing.
- Don’t neglect disability and life insurance coverage – now’s the best time to apply.
Health Insurance for College Students
Finances are tight when you’ve got kids going to college.
And college students’ finances can be tighter still. When that’s the case, it’s tempting to skimp on health insurance.
And that’s precisely what too many people do. In fact, approximately 20% of full-time college students have no health insurance at all.
That can lead to a financial catastrophe: college-age students are young and generally healthy. But they aren’t immune to illness or injury. Thousands of college students every year are involved in auto accidents, sports-related injuries, get pregnant, encounter pregnancy complications, or have serious mental health issues.
The late teens and early 20s are also frequent ages of onset for a variety of severe health issues, such as multiple sclerosis, amyotrophic lateral sclerosis (Lou Gehrig’s disease), schizophrenia, bipolar disorder, and many others.
Without a quality health insurance or health sharing plan in place, these students may face tens or hundreds of thousands of dollars in medical bills.
True, most colleges offer a basic student health insurance plan. But it’s often not the best choice. Many of these plans have limited coverage and high deductibles.
If you’ve got a college-age or soon-to-be-college-aged child (or you’re one yourself), this article will lay out your options and give you a framework for making a decision and getting protection in place.
Keep the College Student on the Parents’ Plan
One option that many find attractive is to have the college student remain on the parents’ plan.
The Affordable Care Act (ACA) allows young adults to stay on a parent’s health insurance plan until age 26, regardless of student status. This may be the best option if they are a full-time student, especially if you have employer-sponsored coverage that subsidizes dependent premiums.
It’s a good idea to check your plan’s network of authorized providers and ensure they have in-network doctors, clinics, hospitals, and other providers near where the student is attending school.
Compare Pricing on the Best Insurance Plans Available
Enrolling in a Marketplace Plan
Another option is to have the college-age student apply for his or her own Affordable Care Act policy.
This can be a great option since most college students have a very low income. If they’re moving away from home and can’t be claimed as a dependent on the parental tax return, they would probably qualify for a very significant subsidy under the Affordable Care Act, making coverage very affordable in most cases.
If the student is moving out of your plan’s coverage area or state, or is otherwise losing their own coverage, they would probably qualify for a Special Enrollment Period that allows them to apply for a new health insurance policy outside of the ACA Open Enrollment, which is November 1st through January 15th in most states.
Once the student loses coverage, he or she has a 60-day Special Enrollment Period to apply for a new plan, with guaranteed enrollment.
This is a great option if the student has a low income, is moving away from home, and will qualify for a significant subsidy.
Let’s take a closer look at the potential costs and considerations between a college student plan and a family plan:
College Plans vs. Traditional Health Insurance At a Glance
| Campus Health Insurance Plan | Family Health Insurance Plan |
|---|---|
| Typically costs $2,000-$4,000 per academic year on average. | Costs vary widely, but each dependent can increase premiums by $150-$250 per month on average. |
| It is designed specifically for students and usually providesp comprehensive coverage for on-campus health services. | May offer broader networks and coverage options, but may have limited coverage near campus. |
| Typically have good coverage for on-campus and nearby providers. | May have limited in-network options near the college location. |
| Integrated with student health centers for easy access to care. | May require more coordination for care while away at school. |
| Plans are available to enrolled students regardless of age. | Can stay on family plans until age 26 under the ACA. |
Health Sharing Plans
Enrolling in a non-insurance health sharing plan can be a great option – especially if an employer-subsidized group health plan or an Obamacare subsidy isn’t available.
Health sharing plans offer several key advantages for college students.
Health sharing plans are not health insurance plans at all. Instead, they are non-profit associations of like-minded individuals who are health conscious, generally healthy (at the time of enrollment, anyway), and who agree to help share the medical expenses of other members.
And they are available at just a fraction of the cost of a traditional Affordable Care Act-qualified insurance policy without a subsidy.
They can be very suitable for students ages 18 and older who are staying home or otherwise will qualify as dependents on their parents’ tax return and the parents don’t receive an Affordable Care Act subsidy they can use to keep the college student on their plan.
These plans operate differently from insurance and may have limitations on coverage and benefits. But the overall benefits make these plans a great option for many.
Here are some of the primary benefits:
1. Cost-Effectiveness
Health sharing plans are generally more affordable than traditional health insurance.
Members typically save up to 50% or more on monthly costs compared to conventional insurance plans. This can be particularly beneficial for college students who are often on tight budgets and looking to minimize expenses.
2. Flexibility
There are a variety of program options tailored to different needs, including those of young single people. This flexibility allows students to choose a plan that best fits their specific circumstances and financial situation.
3. Freedom to Choose
Most health sharing plans allow members to choose their own doctors and care facilities.
Since there are no narrow networks to worry about, it can be a lot easier for young people to access the care they need when they need it.
4. Simplicity
The application process for health sharing plans is typically straightforward and can be completed quickly.
This ease of enrollment can be a significant advantage for busy college students who may not have the time to navigate more complex insurance options.
5. No Geographic Restrictions
Unlike traditional insurance plans with limited local networks, health sharing plans are not restricted by state lines.
This can be particularly advantageous for students who attend college out-of-state, as they can still access coverage regardless of their location.
6. Health Incentive Discounts
Many health sharing plans offer discounts for maintaining a healthy lifestyle.
For example, students can qualify for reduced monthly share amounts by meeting certain health criteria, such as maintaining a healthy weight or blood pressure. This can further reduce costs and encourage healthy habits that will last a lifetime!
7. Community Support
One of the unique aspects of health sharing plans is the sense of community and mutual aid. Members contribute to a pool that helps cover each other’s medical expenses, fostering a sense of belonging and purpose. This community-oriented approach can be appealing to many students.
8. Additional Perks
There can be additional benefits to health sharing programs, such as discounts on prescriptions through companies like GoodRx and NeedyMeds.
Most include 24/7 online telehealth services, and many cover alternative treatment options. These perks can help students save even more time and money on their healthcare expenses.
Health sharing plans can be a viable and cost-effective alternative to traditional health insurance for college students, especially those who are healthy and looking for budget-friendly options.
However, it’s important to note that they are not insurance and may have limitations. They may not cover pre-existing conditions, preventive care, or maternity services. So it’s important to thoroughly research the terms and limitations of these plans to ensure they meet all your student’s healthcare needs.
Learn More: Why Is Health Sharing So Cheap vs Health Insurance?
Health sharing plans are not health insurance plans at all. Instead, they are non-profit associations of like-minded individuals who are health conscious, generally healthy (at the time of enrollment, anyway), and who agree to help share the medical expenses of other members.
They are also available without a subsidy at just a fraction of the cost of a traditional Affordable Care Act-qualified insurance policy.
Also, the student won’t “age out” of a health sharing plan when they turn 26, as they would with a parents’ plan. They can stay on a health sharing plan indefinitely.
There are no “open enrollment periods” with health sharing plans: you or your college-bound student can enroll in a health sharing plan at any time.
Considerations
Health sharing plans work best for those in good health. Costs to treat pre-existing conditions are not shareable. Also, they may not offer maternity benefits for all plan tiers.
When they do, they may require the pregnant individual to be married in order to qualify for cost sharing related to her pregnancy and childbirth (though there are exceptions for pregnancies resulting from rape).
Get A Job
Another option is for the college student to get health insurance from an employer.
This can be challenging in college, since most employers don’t extend health insurance to workers until they work 30 hours per week or more, which can be a lot when the student has a full-time college schedule.
But it can be done. And some employers do extend health insurance to part-time workers.
Here are a few prominent employers who do extend health insurance to part-time employees:
- Starbucks
- UPS
- Staples
- JP Morgan Chase
- Red Cross
- Costco
However, these plans may provide more limited benefits. The worker may have to work for one to three months before being eligible for benefits.
However, the student can still work part-time at any employer and use the money to help purchase a traditional health insurance or health sharing plan.
Purchase a Catastrophic Health Insurance Plan
If your child is in great physical condition, under 30, and rarely needs to see a doctor, you can consider purchasing a catastrophic health insurance plan.
These plans typically have very low premiums, but very high deductibles. They are essentially a bet that the insured won’t get injured or ill or otherwise need much medical care. However, in the event they need care, they can expect to pay 100% of the cost out-of-pocket (or via the Bank of Mom and Dad).
As of 2024, the deductible for a catastrophic health insurance plan can be as high as $9,450 per person or $18,900 for a family plan.
However, while an illness or injury would involve some short-term financial pain, at least a catastrophic plan would prevent a life-changing, bankrupting six-figure medical expense.
Catastrophic plans don’t qualify for a subsidy under the Affordable Care Act. However, these plans can be a great option for people under 30 who want to be prepared with emergency coverage, but have no ongoing medical issues that require routine care.
Medicaid
Medicaid may even be an option in states that have expanded coverage, depending on your child’s income.
However, there will be strict income and asset limits to qualify for Medicaid. And access to the best doctors and hospitals in the area may be limited.
Other Health Insurance Considerations for College Students
Along those lines, you may want to consider getting your child started with life and disability insurance while they are young and likely in good health. Rates will be lower, and it provides important protection for their future.
Disability insurance pays a monthly benefit if the insured suffers a disabling injury or illness that prevents them from earning a living.
Disability insurance is especially important for this age group, as college-age people are much more likely to become disabled and unable to work than they are to die. The best time by far to purchase life insurance and disability insurance is when you’re young, since premiums are so low and coverage is so affordable.
Unlike health insurance, life insurance and disability insurance don’t have guaranteed issue requirements under the law. Insurers can and do look at applicants’ medical records. If there’s a history of medical issues of any kind, they could “rate up” premiums, or even deny coverage altogether.
A simple back injury on a college ski trip won’t hurt a life insurance application later in life. But it very well could make it difficult or impossible to get disability insurance or long-term care insurance. This is another reason why it’s a good idea to get this basic insurance protection in place early on – especially in college.
Medical School Students
Medical school students, in particular, should be looking at disability insurance even while still enrolled as full-time students: it would be financially devastating to have a significant amount of educational debt and then be unable to practice as a physician due to a disabling injury or illness incurred while a student or resident.
Studying Abroad?
For students attending school in other countries, specialized international health plans available that meet visa requirements.
Learn More: Alternatives to Employer Health Insurance
Compare Pricing on the Best HealthShare Plans Available
Don’t Go It Alone
The best health plan choice for your student will depend on your individual circumstances, health needs, and financial situation.
You’ll want to carefully weigh the pros and cons of each option to find the best coverage.
To determine the best fit:
- Compare the total costs, including premiums, deductibles, and out-of-pocket maximums.
- Check if your preferred doctors and hospitals are in-network for each plan option.
- Consider your health needs and how often you’ll need care on vs. off campus.
- Evaluate the convenience factor of using campus health services vs. finding providers through a family plan.
- Factor in any subsidies or financial aid that may offset costs of campus plans.
- Review plan details to ensure coverage for any specific health needs you may have.
- Look into alternative options, such as health sharing plans.
Whatever your circumstances, consulting with a Personal Benefits Manager can help you research your options and find the best fit for your college student’s needs and budget.
It’s easy, free, and there’s no obligation. But our highly-trained, experienced PBMs can typically save a lot of money, vastly reduce your risk, and save a lot of time and hassle!
Final Thoughts
Don’t assume the college plan or staying on your family plan are your only options – take the time to compare all the alternatives. There are some great resources out there to help you break down all the costs, like this Health Insurance Plan Comparison Calculator.
For Further Reading: 6 Things Your Health Insurance Company Would Never Tell You | HMOs and PPOs in Health Insurance | Missed the Health Insurance Open Enrollment? Here’s What You Can Do
Hi! I’m Misty Berryman, and I’m one of your Personal Benefits Managers. I like working with HSA for America because we’re creating solutions to healthcare problems. Our focus on money-saving alternatives like HSA plans and health sharing programs, and the variety of health share programs we offer, are what set us apart. Read more about me on my Bio page.
