Student Health Insurance Tips

TA | January 1, 2010

Each year in May and June, millions of families with graduating high school and college students find that they must replace their student's health insurance because they are no longer covered by their family or school-sponsored plans. Health Insurance , enrollment adviser for MedSave.com, offers a summary of the various types of student insurance and offers tips to help get the most from each type of plan.

Four Types of Student Insurance: Advantages and Disadvantages

Students usually rely on three types of health insurance: 1) parent's health plans (usually employer-provided), 2) college-sponsored plans designed for on-campus health care, and 3) commercial student health insurance. In many cases a student is covered more than one health plan so that the coverage overlaps.  The advantages and disadvantages of each type of health plan are summarized in the chart below.

  Parent's Employer Plan College Health Plan Commercial Insurance Supplemental

No enrollment action required.

Lowest additional cost to parent.

Good coverage at home.

Easiest for students to access on-campus care for routine health care.

Includes some coverage for pre-existing conditions.

Minimal out-of-pocket expense.

Low cost.

National or international coverage.

Any medical provider may be used.

Fastest policy issue, online enrollment allowed; payment can be month-to-month.

May be continued after leaving school.

no deductible, inexpensive, widely available, liberal eligibility


Limited number of medical providers at location of the college.

May terminate at age 21 or 23 before student finishes graduate school.

Limited coverage outside of the U.S.

Limited providers outside of the location of the college.

Referral required for major care.

Limited maximum coverage is not adequate to protect from a catastrophic medical expense.

No coverage outside of the U.S.

Higher out-of-pocket expenses due to policy deductible.

Does not cover eye care or dental.

lower coverage limits, not comprehensive, may be mistaken for major medical insurance


Parent's Health Plans

Timing - Most employer-provided health insurance policies are month-to-month contracts renewed on the first day of the month. Coverage for children who are not students ends on the last day of the month when they turn age 18 and are no longer a full time student. Insurance companies usually ask parents to verify in writing that their teenage children are still full time students eligible for continued coverage. This typically means, for example, that a graduating college student needs replacement insurance before June 1 and a graduating high school student who has turned 18 and is no longer attending school needs replacement coverage before July 1.

Combining coverage - Parents' health plans may be combined with a college-sponsored student health plan but should not overlap another commercial health insurance policy.

Sports - Some popular health insurance policies do not cover injuries sustained from participating in intercollegiate college sports. Check this, if applicable, on your policy.

FSA and HSA - Students usually can continue to be covered under a parents' Flexible Spending Account or Health Savings Account even after changing health insurance plans. This is because the eligibility for FSA or HSA coverage is based on the parent's dependency for tax filing purposes. In other words, a dependant child's out-of-pocket medical cost is presumed to be the parent's cost.

College-sponsored Health Plans

HMO Benefits - Most colleges and universities offer managed-care or HMO-styled student health plans that are based on serviced contracted with local health care providers. These plans make it easy for a student to access care. Coverage is issued at the beginning of each semester and terminate when the student leaves college.

Pre-existing Medical Conditions - Pay particular attention to the treatment of pre-existing medical conditions. Student health plans usually provide limited coverage for pre-existing medical conditions that started before the student started the policy. It would be unrealistic to assume that any student health plan would assume the cost of an existing plan of treatment for a major medical situation. When a student health plan states that pre-existing conditions are covered, there is no assurance that the same plan of treatment will be continued and there may be a gap in treatment during the change in health plans. Student health plans do not usually cover normal maternity (delivery) costs, weight control treatments, mental care, dental care, vision care, over-the-counter drugs and some prescription drugs.

Commercial Student Health Insurance

Nationwide Choice of Provider - Commercial health insurance policies provide nationwide coverage with any medical provider but the cost of medical care may be more than the cost of services offered through a college's health service clinic.

Timing - Some schools and student programs require proof of coverage at the time of admission. These policies can be issued "last minute" online and an ID card printed out from the enrollment site for immediate proof of coverage.

International Travel - The best U.S. policies cover only treatment received in the U.S.; other policies cover expenses incurred outside the U.S. Take a separate travel policy for the period needed to cover medical expenses outside of the U.S. rather than look for a policy that covers both types of expenses. A policy to cover a one week spring break trip to Mexico, for example, costs about $20 and can be issued online within minutes.

Cutting Costs - These policies work best for covering the risk of large medical expenses so save premium cost by choosing a high deductible. The most popular choice for students is a $2500 deductible that brings the cost of insurance down to about $60 per month.

Think Short Term - Short term medical insurance is often a better choice if the coverage may be required for less than three years. Short term policies are issued from one month to 36 months. Consecutive policies are usually allowed. For example, a student may take a 115 day policy while living at school for a trimester and then return to the parent's policy after returning home for the summer. The flexible coverage periods tend to suit students' schedules. Short term medical insurance typically offers higher benefits than insurance plans labeled as student health insurance. A short term policy can save more than 1/3 the cost of a long term policy.

No Pre-existing Condition Coverage - Commercial health insurance is not suitable for covering pre-existing medical conditions or maternity costs.

Continuity of Coverage - Students can keep their private commercial student medical insurance in force after leaving college for as long as they wish, up to age 65 or until the policy is scheduled to expire.

Availability varies by state; see the state-by-state listings of popular policies at MedSave.com

Other Resources

A number of articles on related health insurance issues are posted at MedSave.com.

Telephone and e-mail support for all online enrollments is available through OnlineAdviser service; see the page margin on the right for contact information. This is especially useful when a one-on-one discussion with an experienced professional can help answer questions or compare health insurance alternatives.

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