Health insurance might not be top of mind for the average college student. But it’s best to learn the ins and outs of health insurance coverage sooner rather than later.
As a student, you may consider selecting a plan for multiple reasons. Your university may require you to have some form of health insurance coverage, and you may not be a dependent on your parent’s plan, which would otherwise cover you until the age of 26. Or, maybe you are on your parent’s plan but you’re venturing out of state for college, which could affect coverage terms. It’s also important to consider that in some cases, your parent’s plan may be more expensive than other coverage options. As you start to investigate, you’ll have some inevitable questions. Let this guide answer most of them.
How does health insurance work?
Think of your basic health care plan as a streaming service. Maybe you want to bundle a couple of those services and add them to your existing service. These add-ons would be like adding dental or vision insurance to your health benefits.
The monthly price of your streaming service would be the premium, the amount of money you pay the health insurance company per month to stay enrolled in your plan. But you still have to pay out-of-pocket costs when visiting the doctor. This is like when your streaming service doesn’t have that movie you want to watch, so you have to rent it.
Your streaming service has your back by having something to watch for any occasion, the same way health insurance supports you when you get hurt or sick. If a health emergency occurs, the company you have a plan with will pay for all or some of your healthcare costs, depending on your plan.
How do I get health insurance?
If you are on your parent’s plan, you should start looking at different plans and talking to your employer about their coverage options about a year to six months before you turn 26.
This gives you ample time to lay all your options out on the table and make the best decision for yourself and your financials. Planning ahead also guarantees that you will not be left without insurance once you turn 26. Once you have that part figured out, here are five different ways to get health insurance:
- Enroll in your employer’s group plan: if you have a job that offers health insurance. Your 26th birthday serves as a qualifying life event which means you shouldn't need to wait until your employer's next open enrollment to enroll.
- Buy an individual plan on the online Affordable Care Act (ACA) marketplace: this option allows you to apply for coverage and learn if you qualify for any subsidies. You have 60 days before and after your 26th birthday to enroll in a marketplace plan.
- Join a short-term health plan, which can provide temporary coverage for up to 12 months. Keep in mind that these plans may not cover pre-existing conditions or essential health benefits.
- Get coverage from an insurance company, either directly or through a broker or agent: you can compare different plans and prices and choose the one that suits your needs and budget.
- Enroll in COBRA insurance: With this option, you can continue receiving coverage from your parent’s health insurance plan for up to 18 months. However, you will have to pay the full premium plus a 2% administrative fee.
What does my insurance cover?
Every plan is different and that’s why it’s important to chat with your employer before you turn 26 to find out what kind of insurance they provide – if they provide any at all – and if their coverage options are the right fit for you and your health.
If your employer does not provide health insurance, most individuals utilize marketplace plans.
If you are typically healthy, you may not need a comprehensive and more expensive health plan that is designed for someone with pre-existing conditions or a chronic illness. Likewise, if you suffer from pre-existing conditions and/or chronic illnesses, you should look into a more comprehensive plan with wider coverage for your specific needs.
Basics that are required to be covered by the American Hospital Association (AHA) Essential Health Benefits requirements ensure that everyone in the individual and small group health insurance markets has access to comprehensive coverage that actually covers the services they need. These essential health benefits fall into 10 categories:
- Ambulatory patient services (outpatient services)
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment.
- Prescription drugs
- Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices.
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care.
What is a deductible?
Your health insurance policy requires you to pay a certain amount of money for medical services yourself before your insurance company starts helping out with payments. That certain amount of money is known as your deductible. Say you have a $500 deductible. That means you will pay for medical services yourself until you hit that $500 mark. After that $500 is paid, your insurance company starts to chip in, and you don’t have to pay as much anymore. This repeats each year.
Not everyone’s deductible is the same. But in general, lower monthly payments equals a higher deductible. Higher monthly payments equal a lower deductible.
Want to learn more? These articles tackle other questions young adults may have about health insurance:
- Need A New Health Insurance Plan? Health Care Terms to Know
- What Does HMO Mean in Health Insurance?
- Making Smart Choices During Open Enrollment: The Benefits of an HSA
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