Health Insurance for College Students: How It Works

If you’re heading off to college, think of how you’ll pay for your healthcare. Most college students rely on their parents’ health insurance, according to surveys. But coverage from a parent’s plan might not be the best way to cover your bills and not everyone has this option. There are a few possibilities to set up health insurance for college students. Learn how students interact with the healthcare system and can stay protected.

Key Takeaways

• College students need health insurance to cover their medical bills in the United States, the same as anyone else.
• The majority of universities provide student health insurance plans.
• Students could also get coverage from a parent’s insurance plan, by buying their own individual plan, through a part-time job, or with government programs.
• Some schools require students to buy health insurance but many do not.
• Even if a student isn’t required to buy health insurance, they should still strongly consider it. The cost of medical care in the United States is extremely high and many doctors won’t see someone who doesn’t have insurance. 

Why College Students Need Health Insurance 

“Having insurance is tantamount to access to care,” said Stephen L. Beckley, who has been working on college health programs since 1982. Since the early 1990s, he’s been with the firm Hodgkins Beckley & Lyon, helping colleges and universities develop and refine college health programs for students. 

 “If you don’t have insurance, you don’t have access,” he said. “Even if you have financial resources, providers can be dubious about taking somebody on as a new patient without insurance the provider participates in and recognizes.”

Healthcare costs are very high in the United States. A 2023 Federal Reserve report found that 23% percent of U.S. adults had unexpected medical expenses with a median cost between $1,000 and $1,999 over the previous 12 months. Thousands of dollars in expensive medical bills and medical debt could impact your ability to focus on your studies and stay in college. 

Around 28% of adults reported skipping medical treatment due to cost, according to the Federal Reserve report. Without health insurance, you might skip dental cleanings, prescription medications, mental healthcare, immunizations, and checkups, exposing yourself to more severe illnesses. If you become very ill while in school, you may miss classes or worsen due to healthcare costs. 

“It’s vital for students to have good insurance to stay in school because they can withstand the huge financial circumstances,” Beckley said. 

Note

According to a 2023 American College Health Association (ACHA) report, around 2% of students don’t have health insurance. 

Is Health Insurance Optional?

Whether health insurance is required for college students depends on the state the school is in and several other factors.

Many colleges require insurance or automatically enroll medical students and/or health science students under certain circumstances. But Massachusetts is the only state requiring all students to have health insurance, Beckley said. 

In other states, requirements vary by school—for example, the University of North Carolina and the University of California systems mandate health insurance for students attending school. Twenty-eight states have one or more public universities requiring health insurance for domestic students in the 2023-2024 academic year, according to Beckley’s research.

Note

Generally, most schools with health insurance requirements also offer a health insurance plan. If the school requires mandatory coverage and you have another health insurance plan that qualifies, you can apply for a waiver from your school.  

Some states’ public colleges and universities don’t have any requirements at all, including Alaska, New Mexico, North Dakota, South Dakota, Washington, and Wyoming, according to Hodgkins Beckley & Lyon’s research.

International students may have different requirements. Beckley said that international students with a J Visa need proof of health insurance, but F Visa students do not. However, “most schools apply the same health insurance coverage requirements to all international students,” he said.

Student Health Insurance Plans: How They Work 

As many as three million students are covered by college, university, or other higher-ed institution student health insurance plans (SHIPs). However, the particulars of these student health insurance plans vary by institution, including costs, benefits offered, coverage areas, and how they work.  

A college or university-sponsored SHIP is the primary insurance source for almost 21% of students, according to 2023 research from the American College Health Association. Student plans are provided by 91% of public universities and 77% of private institutions.

The average annual cost of a public university student health insurance plan is $2,924, while a private school health plan averaged $3,874 annually for undergraduates in the 2023-24 plan year, according to Beckley.

“Public institution plans often have slightly lower benefits than private institution health plans, but still usually offer gold or platinum-level coverage,” Beckley said. On the Affordable Care Act (ACA) Marketplace, this metal level means that your copays and other out-of-pocket expenses will be low.

Some public universities offer very broad coverage. Beckley points to the University of California’s system, which offers dental, vision, and a mini-COBRA students can use to keep health insurance after leaving the school. 

The plans are designed to work with the needs of a local student, as well as coverage for internships around the country, study-abroad stays, or spring break.

“Student health plans have integration with on-campus health and counseling services, plus networks of providers that are easy to access and familiar with a student insurance plan,” Beckley said. 

The plans often use a health insurance company’s existing network, such as Cigna or Blue Cross Blue Shield. These may come with extra benefits such as virtual or app-based mental health sessions.

Other surprising features of student health insurance plans are that financial aid awards can include SHIP premiums to reduce monthly costs; coverage is available for spouses and children for an extra premium; and international coverage includes emergency medical evacuation, repatriation of remains, and accidental death and dismemberment.

Other Options for College Health Insurance 

Parent Plan

Students can stay on a parent’s insurance plan through age 26, and most do. According to ACHA, the primary source of health insurance for 54% of students is a parent’s or guardian’s plan. 

But if you’re moving to a different state or region, it’s essential to understand the plan rules and call beforehand (if possible) to understand your coverage. 

“Many parent plans tend to offer a narrow network in the local area, whether you’re across the state or out of state,” Beckley said—even if that plan isn’t designated as an HMO (health maintenance organization). This is true for a parent’s ACA plan too, he noted.

Insurance policies typically feature provider networks and may only cover care within that network, including care provided by your student health center. Depending on your plan, visits to an out-of-network doctor or hospital may not be covered. 

So if you attend school in a different state or a region outside what your parents’ plan covers, you may not have coverage for anything beyond emergency care. 

While you could wait until you go home in the summer or on breaks to schedule preventive checkups and immunizations, you’d go without most urgent care and more regular needs such as mental health services.  

Other parent plans may offer a regional or national network of providers you can access. You can also call a consulting nurse or your provider, or connect with a provider by email or online. 

ACA Plans

According to ACHA, around 2.5% of students rely on a self-bought health insurance plan. This is likely a Marketplace health insurance plan, based in the state where the student will attend college.  If you’re older than 26 or your parents don’t have health insurance, you’ll likely want to enroll in a Marketplace plan. A primary advantage is that the policy will cover care in your new locale.  

If you’re under 30, you qualify for a low-premium catastrophic plan, which offers free preventive care and three doctor visits a year. These plans typically have a high deductible (the amount you pay before insurance begins paying).

One drawback: If you return home to another state for the summer, your ACA plan coverage may be limited to emergencies only. Review your policy plan for details, or call your company to determine how out-of-state care works. 

When you move to attend school, you may be eligible for a Marketplace special enrollment period. This period allows you to enroll immediately instead of waiting for the annual open enrollment period in late fall or early winter.

Workplace Plans

Around 9% of students’ primary source of health insurance comes from an employer’s group health insurance plan—whether their own or their spouse’s or partner’s employer. 

Employers don’t have to offer coverage to part-time workers (although some may). However, some states, such as Hawaii, require coverage for part-time employees working more than 20 hours per week. Still, working enough hours to earn healthcare insurance benefits could eat into your available hours for college attendance, assignments, and studying. 

If you’ve left a full-time job for college, you could also enroll in COBRA. However, this option may be costly, limited in geographic portability, and will only cover you temporarily.   

Other Government Health Insurance

For almost 10% of students, health insurance coverage comes from a government or public health source:

• Medicare for those 65 and older and younger people with specific physical disabilities
• Medicaid for those who qualify due to income or family status
• Veterans Affairs for retired former members of the U.S. military
• CHIP health insurance for those under 19 years of age 

Medicaid might work for some students, but many Medicaid programs present issues for switching designated primary care providers and plans if you’re moving to attend school. 

“It’s a common problem that it’s really hard to get mental healthcare access,” Beckley said, and it may entail a significant wait. “In some states, it’s easy and quick to enroll in Medicaid and get residency without burdensome proof, while in other states, it can take months to complete Medicaid enrollment.” 

How to Choose a Plan for Coverage in College

Increasingly, colleges are touting their health plans, and families face decisions when comparing plans. “If you can save money by going to a school with a built-in health insurance plan at a UC campus versus California State, it’s an important consideration,” Beckley said.  

If you’ve already accepted an offer for a school and are now trying to choose a health insurance option, consider the following: 

• Medication: Can you receive your prescription by mail-order, or is there a local pharmacy you can access?
• Primary care: Can you get a primary care physician who’s covered where you’ll attend school for most of the year? Is that physician accessible if you don’t have a car or primarily spend time on campus?
• In-network care: Are there options for specialist providers, urgent care centers, and hospitals near your school?
• On-campus coverage: Does your health plan (whether ACA, parent, spouse, employer, or COBRA) cover the on-campus health center and mental health services?
• Portability: Does this plan move with you as you travel, work, or study abroad and when you return home?

Frequently Asked Questions (FAQs)

Do Students in the U.S. Get Health Insurance?

Students in the U.S. may be automatically enrolled in their college health insurance plan, depending on the institution and state where the college or university is located. However, there is a quarterly or semester-based fee for this insurance. It is not free. 

Why Do Some Colleges Require Students to Have Health Insurance?

Typically, the colleges requiring health insurance also offer health plans. Colleges require students to have health insurance to help them get care while attending college and avoid burdensome debt that could result from unexpected medical emergencies. In addition, some states make health insurance mandatory for all adults. 

Is Health Insurance Mandatory for International Students in the US?

Health insurance is mandatory for some international students as well as domestic students. Check with your college or university for details.  

Can I Go to the Student Health Center Instead of Getting Health Insurance?

On-campus student health centers can offer affordable services, but good health insurance is still necessary. Student health centers have limited hours, may not be able to manage your complex chronic condition or mental health concern, and are only located on campus—not much help if you’re traveling abroad or taking an internship in a nearby city.

The Bottom Line

Finding the right health insurance that covers you as a college student is important for your long-term physical and financial health. A health plan should offer enough coverage that you won’t be left destitute if you slip and break your arm while skiing—or just crossing the quad. Your school’s student health insurance plan, your parents’ plan, an ACA plan, part-time work, or government programs are all possible ways to get coverage so you stay safe during your studies. 

Read the original article on Investopedia.