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Student Health Insurance Basics

TN | March 16, 2005

 

Students need reliable low cost health insurance that provides flexible protection while they are away from the health care formerly provided through their parents. This insurance should be easy to understand and use, but good insurance does not necessarily need to cover smaller medical expenses.

Availability

Low cost commercial major medical health insurance is available to students in all states except Massachusetts, New Jersey, New York, Vermont and Washington state. Low cost supplemental policies are available in these four states but major medical coverage is a "one size fits all" method in these few states so students must enroll in the same type of policies as adults. Most student health insurance is now issued online. Colleges and Universities often offer limited benefit plans directly through their own health services department. Note that if either the school address or the permanent residential address is in one of these problem states and the other address is not, then use the address where it is easier to buy coverage. Student insurance is valid everywhere in the U.S.

All MedSave.com student insurance policies are available to full-time and part-time students without regard to current course load. Unlike other student health insurance plans, this insurance is not cancelled if the student takes time off from school. All of the insurance plans listed here can be retained after graduation or other leave from school. All of these policies provide coverage nationwide with any doctor or hospital of your choice without the need for a referral.

Suitability, Exclusions and Limitations

Students with serious or ongoing medical problems should not switch health insurance without considering the effect of pre-existing coverage limitations. Most student health insurance policies include limitations or exclusions for pre-existing medical conditions, including pregnancy.

In most cases it makes more sense for a student to buy insurance that excludes coverage for reasonably predictable medical costs. For example, a student that uses an inhaler for asthma is smarter to pay for the medication outside of insurance and take a policy that excludes pre-existing conditions to save hundreds of dollars each month knowing that the financial risks are minimal. In contrast, an obese diabetic student with signs of complications and other medical symptoms should not take this approach because the costs are not known and may not be manageable outside of insurance. In this case the only logical option is the more expensive employer-provided policy or other guaranteed-issue major medical insurance.

Popular brands

The most popular student health insurance plan at MedSave.com is the American Health Shield plan available in 44 states. This is a "plain vanilla" policy that covers ordinary and necessary medical expenses, including prescription, above the chosen deductible. Students typically choose a $500 policy deductible to save premium, but other options are available. The policy does not cover pregnancy expense or the cost of treating pre-existing medical conditions. This policy is available only to U.S. citizens.

Other high quality choices for student health insurance are Celtic Insurance, Golden Rule Insurance, Simple STM and Secure STM. All of these policies can be issued on a semester-by-semester basis. Secure STM is available in 6 month, 12 month and 36 month policy terms. All of these provide coverage throughout all 50 states and allow treatment with any doctor or hospital.

International students visiting the United States prefer the Inbound Immigrant policy. This policy actually provides more liberal benefits than it U.S. counterparts, but coverage must be purchased within 2 years after first arriving in the United States.

U.S. students spending time studying overseas should consider one of the International Health Insurance polices available, depending on the length of their overseas stay.

Other policies are available to students with special medical considerations.

Coverage area

Group insurance coverage provided by an employer or a university tends to focus on a specific geographic coverage area. In contrast, all MedSave.com insurance policies provide equal treatment with any U.S. doctor or hospital. Please note that if overseas travel is anticipated, a supplemental international health insurance policy should be added separately for the period of travel.

Cost

Most individually purchased student health insurance policies cost between $50 and $100 per month. Payment can be made monthly or by semester (6 months). A small discount is available when paying for more than one month at a time. Price varies based primarily on location. Age and sex may also affect price of coverage since insurance companies know that young men, as a group, are the least likely to seek medical care and therefore have the lowest average expected medical expenses.

How soon can coverage start?

Coverage can be started as soon as midnight following online enrollment and electronic payment. Many health insurance companies now offer the option to allow an immediate download of the health insurance ID card immediately at the time of enrollment for students on the move. The most popular times to buy student health insurance are after graduation from high school because parental coverage usually drops off on July 1 and September when students prepare move to a new location. Thanksgiving seems to also be a common time for families to reassess their student's heath insurance because many students who originally sign up with a school-sponsored plan at the beginning of the school year in September realize the coverage is inadequate by November and then switch to a commercial health insurance plan like those at MedSave.com.

Supplemental health insurance

Students and their parents have recently become interested in purchasing supplemental health insurance like Basic Health Insurance to cover policy deductibles and other out-of-pocket medical expenses. This coverage provides cash benefits directly to the policyholder in addition to other coverage that may be made through other health insurance. This insurance should not be used in place of major medical insurance.

PPO discount plans for graduates

Almost everyone should consider coverage under a preferred provider discount plan for medical dental, prescription and other ancillary expenses. These plans provide a discount, perhaps about 25% on average, for out-of-pocket expenses that are usually paid in cash rather than by insurance. Remember that one plan covers the entire household, including students who are away at school. These non-insurance discount plans are inexpensive, ranging from $100 per year for a dental/vision plan to about $300 per year for a full medical/dental/vision plus plan. Most families find that makes good financial sense to have this benefit. See www.ehealthdiscountplan.com for more information.

Other considerations

Student medial insurance policies are not designed to provide full pregnancy coverage, or take over an existing plan of treatment for a pre-existing medical condition. Students with medical conditions should be fully aware of the laws known as COBRA and HIPAA. Nothing in the health insurance polices mentioned in this article overrides the specific provisions of these federal laws that provide the terms of health insurance coverage for individuals with pre-existing medical conditions.

Support

Free personal enrollment support is available through OnlineAdviser by e-mail to help choose the best-suited student health insurance policy. See the contact information on the right margin of this page.

Resources

A number of articles on related subjects and links to other resources are listed at MedSave.com.

See the article "Student Health Insurance Tips" for a comparison of the advantages and disadvantages of the three types of student health insurance and a list of tips designed to help get the most from each type of coverage.

A short video titled "Protect Your Grad" is now available.


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