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If you’re preparing to send your child off to college soon, you’re probably focused on squeezing in some last-minute family time and picking up all the necessary dorm gear. Here’s one other thing to add to your list: Research his or her health insurance options.
Many colleges offer their own health insurance plan to students, and some will automatically enroll students who don’t opt out by showing proof of alternative insurance. About 10 percent of students get their health insurance through their school, according to the American College Health Association, an industry group.
The school plan may make sense for some students, but if you have family health insurance, the better option may be to keep your student on it if he or she is under 26. A third choice that might be worth exploring for students in certain situations would be to purchase a personal plan via the healthcare exchanges.
“The most important thing is to make sure your student has a comprehensive plan that’s going to be there for them when they need it,” says Erin Hemlin, director of training and consumer education with Young Invincibles, a youth advocacy group in Washington, D.C.
Here’s what you need to know about each option.
The Family Health Plan
There are many benefits to keeping your child on your own health insurance. This way, your student may be able to keep her primary care doctor and schedule visits when she's home on break.
The cost could also be lower than signing on for a college plan, especially if you have other children also on the plan. Keeping a student on the family health plan may also mean his spending will count toward the family deductible instead of toward an additional deductible.
If your child is going far away to school, the drawback to staying on the family plan is that doctors she may have to see will most likely be considered out-of-network. But for most students, that may not be a big worry. “If a student is healthy and has no chronic conditions, the network may be less important,” says Shaun Greene, senior vice president with AgileHealthInsurance.com, a health insurance provider.
Some schools allow any student, regardless of insurance, to be treated at the campus health clinic, but you should check with your college. Emergency room visits for medical emergencies are always charged at an in-network rate.
The Campus Health Plan
The way college plans are designed varies, so you’ll need to find out the specifics of the one your student's school offers: how much you’ll pay in premiums (which may be bundled with tuition billed each semester and can run to several thousand dollars a year), co-pays, deductibles, and what your total out-of-pocket costs could be. Be sure to get this information before the deadline for deciding whether you want to be part of the plan.
One of the benefits of signing on for the college health plan is that it will probably include many local providers, which will make it easy for your child to get in-network care while at school. If the university has a medical school, it's likely that providers associated with it are on the plan. Some schools also offer additional financial aid to students to cover plan costs.
Keep in mind that the explanation of benefits and potential medical bills are typically sent directly to the student rather than to the parents. That’s something many students might prefer. “Students have better confidentiality of care when they’re not on their parents’ health plan,” says Stephen Beckley, a senior partner with Hodgkins Beckley Consulting.
One possible drawback of the college plan is that it might provide coverage only during the academic year, so you may need to purchase a short-term plan, something many insurers offer, during the summer. If the plan does provide full-year coverage, it’s a good idea to see whether there are in-network options for care while your college student is back home for the summer.
Though the vast majority of school plans meet the requirements of the Affordable Care Act, some do not. Students who opt for those plans without any other health insurance may owe a penalty at the end of the year.
Moving to a new school counts as a qualifying life event, which means your student can purchase a plan outside of the typical open enrollment period. He can buy it online via the exchanges or work with a broker to choose the right plan.
Low-income students may qualify for a subsidy that could significantly lower costs, although students without any income at all may be kicked over to the Medicaid system. Keep in mind that if you claim your child as a dependent on your taxes, your income will be used to determine eligibility for a subsidy.
Even no-frills plans can be expensive to purchase in the individual market, if you don’t qualify for the subsidy. “For the most part, it doesn’t make sense to buy an individual plan if you have access to a group plan,” says Stephanie Cohen, a partner with Golden & Cohen.
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