For many of us, college brings newfound independence, which leaves us free to make our own decisions regarding our well-being. Yet despite being dedicated to eating (somewhat) healthy and (hopefully) exercising whenever we can, there is one component to preserving our good health that we, as collegiettes, often overlook: health insurance.
Even though most U.S. colleges require that their students have coverage, the workings of health insurance are still a mystery to many college undergrads. But with health care at the center of political debate today, it’s essential to understand what health options are available to you as a collegiette, and how health insurance impacts your life.
Fortunately, the seemingly complicated mechanics of health insurance can be easy to understand! By unpacking all of the whys, whats, and hows behind health insurance, you’ll better understand why health insurance is so important, what options you have, and how it affects your life during and after college.
What is health insurance, and why should I have it?
The first misconception about health insurance, according to Mark Colwell, manager of consumer marketing at GoHealthInsurance.com, is that it’s a plan that guarantees you access to the health care system.
“[Health insurance] is actually a risk management product that gives you access to the financial system,” explains Colwell. “It’s a product that lets you get the money for health-related treatments, not necessarily the treatment itself.”
Depending on your plan, this money usually covers regular medical checkups and fees for prescription drugs. Many plans also cover more serious medical necessities, though not necessarily in their entirety. Nevertheless, the amount of money you could save while preserving your well-being makes health insurance a worthwhile investment, even during your young, college years.
The odd cold here and there may only cost you a few dollars for antibiotics, but more advanced treatment could have you struggling to pay the bills. For instance, most preventative care for women can cost up to a few hundred dollars while trips to the ER can cost a few thousand. Students don’t generally need more serious treatment, but as Colwell and Ellen Laden – Golden Rule public relations director at UnitedHealthcare – caution, you can never predict what will happen.
“One client of ours came in to buy health insurance because her son was running one day and got hit by a drunk driver,” says Laden. “The doctors were sure that he would make a full recovery, but only after care that would cost him thousands on thousands of dollars. I think her story really hammers home the fact that you really never know what will happen to you, so you should always be prepared.”
What plans are out there?
A wide variety of options are at your disposal once you decide to shop for health coverage, with the three main categories consisting of your university’s healthcare package, your parents’ plan, and individual plans. Each type of plan has its own advantages and disadvantages, leaving you to choose which plan best suits you.
College/University Health Plan
More than half of universities and colleges now offer health plans, according to a 2008 study by the Government Accountability Office (GAO). While the quality and number of coverage choices varies, college health plans generally provide for students’ basic needs, making them an adequate option.
Pros: College health plans tend to be much cheaper than those catered to individuals, with some premiums (monthly payment to an insurance company for your coverage) dipping down to as low as $30 per year. They’re also very well adapted for a student lifestyle, as they cover basic medical needs like checkups, prescription drugs and vaccines.
Cons: But because college health plans are geared towards keeping disease from spreading around campus, you’re probably not going to get as many benefits or health care provider options as you would if you were on an individual plan. As a result, you’re going to get a very general health plan that may not cover your own specific needs, especially where pre-existing conditions like diabetes or respiratory illnesses are concerned. What’s more, coverage ends upon your graduation, making your college’s health plan a temporary, rather than a long-term, solution.
With the new health care law mandating that insurance providers beef up their coverage, many colleges are telling students to expect a sharp rise in premiums or to be prepared in case the college drops health insurance plans.
Parents’ Health Insurance Plan
Another popular choice is for you to become a dependent on your parents’ health plan, which over two thirds of college students opt to do. The option is set to become even more popular as the Affordable Care Act mandates that dependents can stay on their parents’ health plan until they are 26.
Pros: Because you can stay on your parents’ plan until you’re 26, you’ve got a good post-graduation safety net in place, especially if you’ll still be looking for a job as you won’t have employer-provided insurance. What’s more, your parents’ plan tends to provide more extensive coverage than a college’s, especially where pre-existing conditions are concerned.
Cons: If you attend college outside of your hometown or city, make sure to double check the extent of your parents’ health insurance network. The biggest problem students face when on their parents’ plan is being unable to access health providers because they live too far away. In some cases, your parents’ health insurance plan may not cover trips to college health clinics, either. As a result, always check to see what your parents’ plan does cover, if it will cover you at all.
Individual Health Insurance Plan
Finally, if neither one of the previous options appeals to you, you can always seek your own individual health plan. Health insurance companies are very open to young adults, and you’ll soon find that you will have no shortage of choices to include in your plan.
Pro: While college and parent health plans come with a set list of what treatments are and aren’t covered, an individualized health plan allows you to select coverage tailored to your own needs. They’re also more affordable than is generally believed, with some premiums dropping as low as $600 per year. Health insurance providers love to cater to young, healthy adults, making individual health plans an option that can definitely be considered.
Cons: One of the biggest concerns surrounding individual health plans is the prospect of being denied coverage for pre-existing and chronic conditions. While you can still find health insurance that caters to more serious conditions like heart disease and high blood pressure, they will most likely be set at exorbitant prices that are way out of your budget. Many individual health plans also exclude college health clinics as part of your network of health service providers, so be sure to double check which providers are available to you.
How should I choose?
Now that you know what plan options are at your fingertips, it’s time to choose one! The process of selecting the right health insurance plan for you can be tricky, but there are steps that, when followed, can lead to the health plan that’s best for you.
Step 1: Look at your health
What you’re going to need coverage for depends on your current state of health, so the first step is determining what medical help you will need to keep you safe. Most college students are healthy minus the occasional flu and minor physical injury, meaning that they don’t generally need anything beyond a few basic services. In that case, a college or individual health plan will cover most, if not all, of your health expenses without any problem.
But what if you have more serious conditions that need more expensive and ongoing treatment? “We [at GoHealthInsurance.com] recommend that you go away from individual and college plans to your parents’ plan,” says Colwell. “Your parents’ plan is the one that’s best equipped for dealing with pre-existing conditions.”
Step 2: How are you going to use your plan?
Are you just going to go in for the odd medical exam? Or are you going to be seeking a doctor on a regular basis? Part of tailoring a plan to your own needs involves knowing which treatments and services you will use.
As you browse through the options in front of you, make sure to read each provision carefully. You don’t want to under-select the provisions you need, as that leaves room for accidents to happen that could leave you saddled with fees. But at the same time, you don’t want to over-select, which will result in you paying extra for services you will probably never need.
Step 3: Your budget
So now that you’re aware of your body’s health conditions and what services you will be using, it’s time to figure out how much you want to spend on health insurance. This is where you need to also consider two more aspects of health insurance: premiums and deductibles.
Premiums are the monthly payments you make to insurance companies to keep your health insurance plan valid. Deductibles, on the other hand, are the yearly payments you make to those same companies when you receive care, with the insurance company paying the remaining amount.
“Depending on how regularly you’re going to receive care, you may want to have a plan that has a higher premium and a lower deductible, or a higher deductible and a lower premium,” explains Colwell. “For example, we encourage women who get frequent reproductive checkups to buy a plan with a higher deductible, since they’ll be seeing health providers more.”
Step 4: Talk to Your Parents
Even if you aren’t considering becoming a dependent on your parents’ plan, it’s always good to double-check details with them and inform them of the options you’re going to take. This is especially true if it’s your first time shopping for health insurance, as your parents can most likely offer you advice about going through the process. So make sure your parents are involved! They should, at the very least, be informed of your decisions and what you think you need.
But watch out!
No matter what you’re shopping for, there are bound to be traps that companies use to get you to buy faulty products. Sadly, health insurance works the same way, so keep your eyes peeled for potential pitfalls!
Colwell and Laden both warn against anything with the word ‘discount’ in front of it. “Discount health plans aren’t actually health insurance plans,” explains Colwell, “They leave you thinking that you have the coverage you need when in reality, you’re only getting limited benefits and care.”
You can be sure to get all the coverage you need by making a point to check that all providers are in your area. That way, you won’t be duped and you won’t need to worry about fees that can creep up on you when you least expect them to.
What do I do if I’m graduating?
Your health insurance options post-graduation depend on the plan you were on while in college. If you were on your college’s health insurance plan, take a look at what you’re doing post-graduation and move from there.
“Let’s say you do have a job lined up for you the moment you graduate, in that case you’re set because you’ll be under an employer-provided plan,” explains Colwell. “But if you’re still searching, you can invest in a short-term individual plan, which usually covers you for six months to a couple years.”
Students on their parents’ plan can remain so until they are 26, after which they will need to follow the same process. But have no fear, says Colwell, as young adults are more easily matched with plans because of their good health. So even if the future search for health insurance is daunting, options will always be available to you.
That’s all fine and dandy… but what’s health care reform going to change?
So we’ve laid out the logistics of health insurance, but with health care reform still unfolding some provisions are bound to change.
The biggest change that has already occurred is that young adults can stay on their parents’ plan until they are 26, an alteration that accounts for your transition out of college. Collegiettes will also be relieved to know that women are among the biggest beneficiaries of the current health care reform, especially where health insurance is concerned.
“What’s changed for women is that health insurance plans are now required to cover preventative and wellness care,” says Colwell. “So now, a lot of the regular services women needed are covered, which takes a lot of the financial burden off their shoulders.
One of the final changes set to roll out this year is the “pre-existing clause,” which will make it illegal for health insurance providers to deny coverage to patients with pre-existing conditions. The change will be an important one, as one of the most controversial debates surrounding health insurance centers on the exclusionary policies targeted at those with pre-existing conditions, hence the change is welcomed by many.
While there are many aspects of health insurance coverage that need to be understood, the knowledge will ultimately benefit you in the long-run as you go through -- and graduate from -- college. In the end, a health insurance plan will only ensure that you are well-prepared for whatever comes, making it a worthwhile investment that will, ultimately, leave you feeling