Health Reform and College Health Insurance Choices

If you're a college student, health reform has probably been good to you so far. However, there are changes taking effect just in time for the 2012-2013 academic year that could alter your health insurance options and might send some students scrambling for coverage.

If you’re a college student, health reform has probably been good to you so far. However, there are new changes taking effect just in time for the 2012–2013 academic year that could alter your health insurance options and might send some students scrambling for coverage.

Big changes for school-sponsored plans

Now, just in time for the new school year, a popular coverage option—school-sponsored health insurance—is being restructured to meet the requirements of the ACA.

Most colleges and universities require students to have coverage, and school-sponsored health insurance plans are often promoted as an affordable, convenient alternative to Mom and Dad’s health plan. Historically, many of these plans offered only limited benefits with strict dollar caps on how much would be covered per year or per condition. According to a federal government study, a majority of school-sponsored plans capped coverage at $50,000 or less in 2008, which may not be enough in case of a serious accident or illness.

Health reform is now forcing these limited-benefit plans to act more like major medical health insurance plans. Most are now required to provide prescription drug coverage and to cover more preventive medical care services at no out-of-pocket cost to the enrollee. Plans with coverage limits are required to raise those limits substantially in 2012, and caps will be phased out entirely in 2014.

While richer benefits may be a plus for students enrolled in school-sponsored plans, it often comes with a price tag. Some colleges and universities worry that rising costs may make their school-sponsored plans unaffordable for a certain percentage of students.

Another provision of the ACA that went into effect this year may rule out school-sponsored plans entirely for some students. Beginning on August 1, 2012 all health insurance plans are required to provide broader coverage for women’s and reproductive health services. This includes coverage for regular well-woman visits and screening for some STDs. It also means coverage for prescription birth control. As a result, some religiously affiliated schools have chosen to drop their school-sponsored plans.

Staying on Mom and Dad’s health plan not the best option for some

College-aged young adults were among the first to benefit from the 2010 Affordable Care Act (ACA). Starting in September 2010, six months after the ACA was signed into law, health reform allowed many adult children to retain coverage on their parents’ health insurance plans until their 26th birthday, regardless of their college enrollment or dependent status.

As a result, the percentage of college-aged young adults going without health insurance dropped significantly. According to a Gallup poll from 2011, the number of uninsured persons between the ages of 18–25 dropped from 28% in January 2010 to 24% by January 2011, even while the percentage of uninsured person in other age groups continued to increase.

And yet, as some have discovered, sticking with Mom and Dad’s health insurance plan is not always the best choice. If you’re going to school in a different state, for example, you may have no access to in-network medical providers, and your benefits could be reduced. Review the costs and benefits of your parents' plan with them and your insurance agent and compare them with other options to ensure you're getting the best deal possible.

Three more health insurance options for students

Students who don’t have the option of sticking with Mom and Dad’s plan or enrolling in a school-sponsored plan may still have other choices. Here are three worth considering.

Individual health insurance plans: Every college student should review his or her options in the individually purchased health insurance market. Until 2014, it’s still possible to be declined coverage based on pre-existing medical conditions, but individual plans can be relatively affordable and there are a lot to choose from. Thanks to health reform, individual plans now provide more robust benefits and access to more preventive care at no out-of-pocket cost.

Non-school-sponsored student plans: These plans may be especially attractive for students attending school in a different state, or who plan to travel back and forth a lot. Coverage levels typically won’t change when students travel from one state to another (international coverage may even be available), and enrollees may have the option to pay up-front for year-round coverage rather than pay month-to-month.

Short-term plans: Some students turn to short-term health insurance plans when they expect to have another form of coverage (through parents or employers, for example) within six months or so. Many short-term plans allow policyholders to renew their coverage for a second six-month period too. Keep in mind that while short-term plans provide a valuable backstop to unexpected health insurance bills, they’re not designed to provide robust preventive care or prescription drug coverage or to cover pre-existing medical conditions.

Work with a licensed agent, online or in your local area, to get quotes for these three health insurance options. There is no extra cost when you work through an agent and it can save you time and hassle. To learn more about student health insurance options, visit

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