A Collegiette's Guide to Health Insurance

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.