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Tips for Buying Student Medical Insurance

January 1, 2010

 

Each spring millions of families with graduating high school and college-age children find that they must replace their student's health insurance because they are no longer covered by their family or school-sponsored plans. Even when parent's employer-provided group coverage is available, it is often not the best choice for a college student who will be far from home. OnlineAdviser service at MedSave.com offers these tips for college students and their families to help find the best student medical insurance plan.

Understand the four types of coverage

There are four types of student health insurance coverage: parent's plan, university-based, commercial and supplemental.

Parent's employer-provided group insurance plans are a good option when the price is partially paid by the employer and the plan does not penalize treatment received outside of the network area. You cost depends primarily on the employer contribution, with the net cost ranging from $600 to $3,000 per year. The primary advantage, where these group plans are available, is that they provide the strongest coverage for pre-existing medical conditions.

University-based health plans provide the best access to routine and primary care but restrict coverage for more serious treatment and may not provide adequate coverage away from campus. College health plans are increasingly managed care contracts rather than health insurance so do not presume that these plans will cover treatment back home or while traveling. A typical plan costs $1,200 to $2,000 per year.

Commercial insurance for students student medical insurance plans provide coverage with any doctor or hospital anywhere in the U.S. rather than restrict coverage to a particular participating providers in the college community. These medical insurance plans are "indemnity" type which means that they cover the "ordinary and necessary expenses" as determined by a private physician under AMA standards with any doctor, hospital or provider of your choice. There is no required pre-authorization or required network. A typical plan costs $700 to $1,200 per year with a $500 or $1,000 deductible. Students can keep their private commercial student medical insurance in force after graduation for as long as they wish, up to age 65. These plans can be integrated with health savings accounts.

Some families combine a major medical insurance plan with supplemental accident or emergency insurance, especially if the primary coverage has a high deductible.

Shopping Tips

Medical insurance rates have increased to keep pace with medical cost inflation and this trend is expected to continue. Student medical insurance plans often announce new rates around June 1 of each year, just before spring semester graduations. Early birds who enroll before June save money by locking in lower rates for the year ahead. Those who enroll before graduation may be covered for years later under the same low cost student policy, long after they have left school.

Most plans are purchased for a semester (6 months) or a year at a time. The premium cost is lower paying at least a semester at a time rather than month to month. Commercial short term medical insurance is often a better choice than other types of student insurance if the coverage may be required for less than six months.

Plan to keep the coverage in force for at least a few months after graduation. Most employer plans do not start until after at least 60 days on the job. Avoid insurance that terminates at college graduation.

Student medical insurance plans are a great deal for graduate students and older "non-traditional" students because the premium rates are based on the very low average medical expenses of the more typical 18-21 year old student population.

Compare Brands

The most popular commercial insurance plan for students nationally is American Health Shield. This is not because it is always the best choice, but rather because it is simple strong coverage, easy to understand and has a strong brand recognition and reputation. Other brands offer Check out the other options listed here on a state by state basis.

Other considerations

Student medical insurance plans usually do not cover the cost of treating pre-existing medical conditions. Even those plans that provide some pre-existing condition coverage, it may not be enough to protect a student with serious ongoing treatment for a condition like diabetes, for example. Students face the same difficulties financing this coverage as other adults; see "Finding Health Insurance to Cover Pre-existing Medical Conditions". Student medical plans do not cover maternity costs, weight control treatments, mental, dental, vision, over-the-counter drugs and pharmacy prescriptions, or injuries sustained from participating in college sports.

Be wary of limited benefit supplemental insurance. This is not a substitute for comprehensive major medical insurance. Select a policy that says "major medical insurance" in its description.

When travelling outside of the United States, it always makes sense to purchase an additional international medical insurance plan. These are often priced at less than $20 for a short trip and alleviate almost all of the concerns about the need to obtaining emergency medical care outside the country.






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