Health Insurance Options
Find Plans, Get Covered & Learn What the Affordable Care Act Means to You
for College Students
Under the Affordable Care Act (ACA), all Americans are now required to have health care coverage. For college students, this typically means remaining on their parents’ plan, buying their own insurance, or signing up for Medicaid coverage. Although medical insurance can be complicated, finding the right plan – and the peace of mind that comes with it – is well worth the effort, as insurance coverage can save students thousands of dollars if they face unexpected medical expenses. Before purchasing anything, students should take the time to understand the ACA and how they’ll specifically be impacted. Keep reading to learn about student medical insurance options and how to get covered.
Navigating the Affordable Care Act
The Affordable Care Act – also known as Obamacare – has allowed many Americans to receive health care coverage, with college students among the main beneficiaries. Students can choose from several options based on their personal needs and circumstances. In order to further understand the benefits of the Affordable Care Act, we interviewed Hector De La Torre from the Transamerica Center for Health Studies.
First, the ACA allows young adults to stay on their parents’ plan until they reach age 26. Second, the ACA established exchanges where people, including students, with low and moderate incomes can purchase subsidized health care plans. Students can purchase an individual plan through the traditional individual market – subject to the relevant open enrollment period. Some states allow people under 30 to purchase catastrophic plans (which feature low premiums and cover only serious illnesses or accidents) that allow them to meet the individual mandate requirement of the ACA, but these may not qualify as insurance under their school’s coverage requirement. Lastly, many states expanded Medicaid coverage to individuals making less than between $11,770 and $16,243 per year. However, students in non-expansion states rarely qualify because they are not eligible as non-disabled adults.
First, students should ask if their school offers a Student Health Insurance Plan (SHIP). 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 SHIPs and require that students opt out if they want to get coverage elsewhere.
If a student’s school does not offer a SHIP, or if it is too expensive, the student should ask their parents what type of health plan they have and look into staying on that plan. If that is not an option, students should visit www.Healthcare.gov to see what plan they can qualify for.
School counselors, parents, and friends are all good sources for information. Students can also visit www.Healthcare.gov for more information. The most important thing students should think about is the plan’s monthly premium compared to out-of-pocket expenses. The 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 with a higher premium, you have lower out-of-pocket costs and vice versa.
Plan costs will vary greatly depending on the type of plan and students’ (and their parents’) income and assets. However, many students will qualify for subsidized care through an exchange.
Many people have a preferred medical provider that they go to. Picking a plan that is not accepted by your doctors or preferred hospital can result in you either having to get a new doctor, switch plans, or pay higher out-of-network fees. Make sure you pick a plan accepted by the providers you want to see.
Another mistake is students 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. Also, a mistake that students commonly make 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.
There is no special student exception to the requirement to have health insurance. Students need to have health coverage in order to avoid the tax penalty.
Minimum Essential Coverage Requirements
Under the Affordable Care Act, everyone is required to obtain minimum essential coverage to avoid being charged penalties, although some exemptions apply. The following are examples of health care coverage options that meet the minimum essential coverage requirement.
Students who work while attending school may obtain health care coverage through their employers. Under the law, this insurance must meet the minimum care standards, including covering in-patient hospital care and physician services. In addition, job-based plans must be considered affordable, meaning that they cost less than 9.5 percent of an employee’s household income after the employer’s contribution.
College students can stay on their parents’ health insurance plans until they’re 26 years old – even after they graduate. They are also still eligible if they get married, have a child, or move out of their parents’ home. Students who are not already covered by their parents’ insurance can be added during open or special enrollment periods.
Under the Affordable Care Act, Medicaid was expanded in order to provide coverage to low-income Americans. In order to be eligible, students must have earned less than $16,243 in 2015.
Many colleges offer medical insurance plans to students, which may be funded directly by the school or through an insurance company. The costs of school-based plans are charged with the institution’s other expenses, so students can apply loans to their health care coverage.
Those who do not get coverage through a job or parent, and cannot afford to pay the full amount of a policy, may be eligible to get subsidized health insurance for a substantially reduced price.
People under 30 can purchase a catastrophic health plan, which is designed for those who cannot afford other types of coverage and need a plan with a low monthly premium. These plans are designed to protect against major, unforeseen medical expenses; basic coverage is much more limited, including certain kinds of preventive care and three doctor’s appointments.
How to Choose & Purchase Student Medical Coverage
Choosing the right health care plan is no small matter. Those who need medical care because of an accident or serious illness can easily be charged thousands of dollars if they don’t carry insurance. Such costs can put a huge strain on a student’s finances for many years, and in the worse cases can even lead to bankruptcy. Even if students do not incur high medical costs, foregoing insurance is not a financially sound option because, under the Affordable Care Act, individuals without coverage may be charged a penalty. As of 2016, the penalty for not having insurance is 2.5 percent of household income, or $695 per adult, whichever is higher.
Making an informed decision about medical insurance starts with education. Students must familiarize themselves with the intricacies of choosing and purchasing coverage as they look for a plan that meets their specific needs. Below are some major points to consider.
The health insurance marketplace is where people can find information about available plans. Some marketplaces are offered by individual states; if not, people may shop at the federal marketplace.
Although marketplaces provide an overview of plans, it’s often helpful to speak directly to insurers to flesh out the details of coverage. Students should find out what specific benefits (such as vision and dental care) are included, what type of prescription coverage is available, the cost of monthly premiums, and the amount for deductibles and annual out-of-pocket maximums. In addition, it is especially important for students who attend college away from home to find out if doctors near their school are considered inside or outside of the insurance’s network, which may affect costs significantly.
Insurance plans that have limited benefits do not fulfill the minimum essential coverage requirement. Examples include workers’ compensation, dental, or vision insurance. Plans that only cover a specific medical condition, or offer only discounts for treatments, also do not qualify.
In some circumstances, people can get an exemption to the minimum essential coverage requirement, so they do not pay a penalty for not having coverage. For example, people who have become unemployed, were evicted from their residence, or do not meet a minimum income threshold, are eligible to receive an exemption under the law.
Those who do not pay the penalty will have their income tax refunds withheld.
The insurance enrollment period is the time of year when people can choose their insurance plan. At the federal level, for example, open enrollment runs from November 2016 through January 2017 to receive coverage for 2017. People can also qualify for special enrollment outside of this time frame, which can be triggered after a marriage, job loss, or the birth of a child. Also, those who were covered under their parents plan qualify for a special enrollment period on their 26th birthday.
Subsidies are issued based on income. In order to qualify for a subsidy in most states, someone’s income must be less than 400 percent of the federal poverty line. For example, in 2016 the poverty level for a single person was $11,770 per year. Thus, someone earning less than $47,080 would qualify for a subsidy, such as a tax credit.
Although health insurance can be purchased through a government marketplace, payments are made to company offering the plan. Students who have coverage through their school plan often pay their college directly.
Health care coverage can differ from state to state, so when people relocate, they may be required to sign up for a new plan.
Students who attend college out of the country can receive an exemption if they will be gone for at least 330 days in a one-year period.
Travel & International Student Insurance
Studying abroad can be an exciting experience for students, and among the many preparations they must make is researching medical insurance – including learning what type of coverage is needed when traveling, and where to get it.
Many study-abroad programs require that students obtain medical insurance in order to participate, and some health care providers in different countries will refuse to provide treatment without a guarantee that they’ll be paid. These factors make it particularly important for students to understand their options before they leave the United States. The following are some facts that students should know about international insurance:
In some cases, students who have health care coverage through their school, parents, or an individually purchased plan already receive some coverage when they go abroad. However, in many cases, students may be required to pay upfront costs to their insurance carrier before the trip, or they may be charged high out-of-network fees for using their insurance in another country. The coverage that students receive depends on their specific plan and may include prescriptions, mental health care, and emergency services.
Students who are not covered by their existing plans may purchase travel insurance that covers certain medical expenses, like hospitalizations and routine patient care. In some cases, a plan may also cover preventive services or chiropractic and acupuncture care.
Medical care in foreign countries can be very different from what people are used to receiving in the United States. For example, some treatments that are considered routine overseas are classified as experimental at home, and may not be covered by U.S.-based insurance. Similarly, students may take certain medications that are commonly found here, but when they travel, these prescriptions may not be available in other countries. When planning a trip, it’s important for students to be aware of these differences and have a plan to address them.
Generally, students will pay for their medical insurance coverage upfront and receive a reimbursement when they return to the United States.
Students who are traveling to the United States should keep in mind that they need to obtain health insurance while they’re living here. This can be quite a paradigm shift for some international students, as they may be used to receiving government-sponsored health care for free.
International students are legally required to obtain medical insurance that meets certain standards, so plans should provide at least $100,000 for each illness or accident, $7,500 in reparation coverage in the event a student passes away, and $10,000 for medical evacuation if needed after an illness or injury. Students can often receive the coverage they need through their host college, but they should review their specific school’s plan before they come to the United States.
Students who are going overseas as part of a study-abroad program through their school can find information about insurance at the international student office. This can be an invaluable resource to help students find out what kind of coverage they need to obtain in the specific country they’re going to, and how to use their insurance once they get there. Also, the host school can provide information on how the health care system works in that country.
Insurance Information & Additional Resources
Medical insurance is a serious and complex topic, and students may need to do extensive research to choose the right coverage. More information is available from the sources listed here.
Provides advice on how to buy insurance through the Health Insurance Marketplace.
Explains catastrophic health care plans and who qualifies for them.
The Young Invincibles website answers several questions that students may have about health care coverage and how to find an insurance plan that is compliant with ACA regulations.
This page, part of Healthcare.gov, provides an explanation of what medical insurance is available to young people (under age 30) and how to obtain it.
This site explains insurance terms, provides a step-by-step primer on getting insurance, and gives information on choosing insurance plans in different situations.
This section of Healthcare.gov explains how students can remain on, or get added to, their parents’ health insurance plan.
The Internal Revenue Service explains minimum essential coverage requirements.
This section on the Healthcare.gov site includes information on eligibility requirements for Medicaid coverage through the Affordable Care Act, and how to apply to the program.
The Centers for Medicare and Medicaid Services provides information on student health insurance.
Information provided by the White House answers questions on how young people can get health insurance through the Affordable Care Act.
Provides information about how to find a doctor abroad, and how to obtain and use medical insurance.
Explains what travelers need to know about medical insurance.
Describes how students can obtain health insurance before traveling overseas.
Has information on what is covered by Medicare when people travel abroad.
Includes student health and safety information from the Centers for Disease Control and Prevention.
Explains the types of coverage that students going abroad can receive through different insurance companies.
The Centers for Disease Control and Prevention offers information on travel health insurance.
This page includes information on what students need to know about health insurance when they come to the United States.
Includes an example of a student health care plan for those studying abroad.
The U.S. Department of State provides information on how to handle health care needs when traveling.