Going to college is a bag of mixed emotions. It is both an exciting, yet a frightening time for millions of young people around the world who finally get to spread their wings and enter the ‘real world.’
It is a time where you finally get to be free and away from the parents, make new friends, and find out who you truly are.
With that freedom, responsibility arises. When it comes to finances, be smart, particularly controlling health insurance costs. If you are not smart about your plans, health insurance can be a real burden that can hamper your college experience.
For those who are in college or looking to go in the near future, taking the time to prepare will help you save money for other important matters such as overpriced textbooks and nights out at the bars with friends.
QuoteWizard, an insurance comparison tool and ‘think tank’ wants to let you know that you have options to keep your costs relatively lower.
Here is what you should know about common options for young college students on the cusp of becoming a fully-functioning adult to help you pick the right health insurance plan.
Stay on Your Parents Health Insurance Plan
We know that college students want to be feel independent, but the reality it that is not always rationally feasible. We recommend swallowing your pride and ego when it comes to health insurance, and stick on your parent’s health insurance plan as long as you can.
Since 2010, the Affordable Care Act (Obamacare) passed allowing young adults to be added and/or stay on their parent’s health insurance plans until he or she is 26-years old.
While not required by the federal government, insurance plans often offer coverage for a dependent even if the college student is living alone, eligible to be on employer’s plan, receives enough income to be financially stable without the parent’s support, and even married.
This rule of dependence essentially means that children can be insured and fully covered under the parents plan with similar benefits. However, you want to double check with your insurance policy to see if your plan allows dependents.
Those who are going to school out of state must be wary of the potential pitfalls choosing to stay on your parent’s health insurance plan. In this case, there are likely no in-network providers that you can visit in the school’s vicinity.
We recommend speaking with your insurance provider about regular health checkups and emergencies that may occur while studying out of state.
If your insurance does not allow you to be covered out of state, you can get around this by scheduling preventative visits during breaks from school and vacation periods. This will allow you to maintain a dependent status on your parent’s plan and have access to your in-network physician.
Look into a School Sponsored Plan
If the options above do not fit your liking, look into plans that your college offers. With this option, do some research and speak with your school’s financial aid office for specifics as some schools will offer it and others will not.
With this choice, some colleges have its own direct plans which takes control and pays any claims made. Others, will go through a partnership and 3rd-party company which handles the process.
The major benefit of using a school sponsored insurance plan is that the costs are usually incurred and combined with other school related expenses, allowing you to transfer the costs to student loans to cover it.
Another caveat to this route is the coverage may not be sufficient enough for you. The limitations might be there in which the details need to be diagnosed beforehand. Double-check the coverages and make a sound decision to take this direction or not.
Insurance Government Marketplace
Since you are not likely making any significant income, you might find it best to purchase your own plan through federal or state “exchanges”. For those who make certain incomes below a threshold, you may qualify for lower monthly premium costs, receive tax breaks, and receive other miscellaneous savings.
You can find information pertaining to your current situation for what the government can offer you by visiting the income levels “Quick Check Chart” for lower health costs here.
Only Buy a ‘Catastrophic’ Plan
For everyone under the age of 30 (college or not), there are options for those to purchase a special ‘Catastrophic’ plan. It sounds intimidating and dooming, but is open to anyone who does not like the options already stated and can save you an extra buck.
The major benefit of this plan is your monthly premiums (monthly fees) are going to be relatively lower. The flip side to this is if something does happen to you, your premiums do not count towards paying for the accident.
This means that during an accident or injury, your deductible (amount you pay out of pocket if you need medical attention) is going to be much more expensive.
This is something that you need to find a balance. Do you want to pay more upfront through your monthly premiums and pay much less for doctor/specialist visits, or do you less monthly, and pay a very high deductible after the incident?
For more information about the catastrophic plan check this out.
Take Advantage of Medicaid
Medicaid opened up to a larger portion of the population since the Affordable Car Act. Medicaid is a plan that helps people with lower incomes, disabilities, or in unique situations relating to your family.
Since the government opened the plan to a wider audience, college students now have access to this plan for their health insurance. This helps anyone under the age of 65 whose yearly income is up to 133 percent of the federal poverty level.
This sounds puzzling, but if you do not make much money, it does not hurt to apply and see what happens. More states are opening up the availability and becoming more flexible who is allowed on this type of plan.
The government suggest that people apply so why not try? If not, then the last option may have to be the road travelled to help you save a pretty penny.
Negate Health Insurance Altogether
The least suggested option, but the cheapest is dropping health insurance for a few years while in college. You will not have to pay for anything related to health insurance as long as you are healthy, but life happens, and you never know what can happen to you just walking down the street.
This should only be used as a last resort if you know that you will not be able to afford it with the other options mentioned above. If you somehow cannot get into the Medicaid plan, this alternative may be the only way to get through college without being burdened with expenses.
Important to note that since the Affordable Car Act was enacted in 2010, if you make less than $10,000, am single, and under 65 you must have some sort of ‘qualified health insurance’.
If you ignore this rule, a tax penalty will incur. According to healthCare.gov, for 2016, the fee is $695 or 2.5% of your income – whatever is higher
Overall, if you are a student in college or college bound, do yourself a favor and do some research and get a health insurance plan that covers you and saves you money.
Take your time and analyze all your angles of approach and compare rates to help you keep your health insurance costs down. Good luck, and let us know what you think about these 6 healthcare insurance options for college students.