Health Insurance for College Students: Options and What to Know

Health insurance is something every college student needs, but figuring out the right option can be confusing. Between parents' plans, university student health plans, marketplace coverage, and Medicaid, there are several paths to getting covered. This guide explains how each option works, what to watch out for, and how to make the right choice based on your situation.

Staying on a Parent's Plan Until Age 26

The Affordable Care Act requires most health insurance plans to allow children to stay on a parent's plan until they turn 26. This is the most common way college students have health insurance, and for many, it is the easiest and most affordable option.

There are very few restrictions on this benefit. You do not need to be a student. You do not need to live with your parents. You do not need to be a tax dependent. You can be married. You do not need to be employed or unemployed. The only requirement is that you are under 26 years old.

This rule applies to employer-sponsored plans, individual marketplace plans, and most other types of health coverage. The one exception is grandfathered individual plans that existed before the ACA, but these are increasingly rare.

Advantages of Staying on a Parent's Plan

• Usually the lowest cost. The parent's employer often subsidizes a large portion of the premium. Adding a dependent to a family plan is often cheaper than buying a separate individual plan.
• Comprehensive coverage. Employer plans often offer broad networks, low deductibles, and comprehensive benefits including prescriptions and mental health.
• No enrollment hassle. You are already on the plan, so there is nothing to apply for or set up.

The Out-of-State Problem

The biggest issue with staying on a parent's plan as a college student is out-of-state coverage. If your parent's plan is an HMO or EPO based in one state and you attend school in another state, you may have very limited or no in-network providers near campus.

PPO plans generally have national networks or out-of-network coverage that works across state lines. If your parent has a PPO, you will usually have access to providers near your college, though you may pay more for out-of-network care.

If your parent's HMO does not cover you well at school, you have options. You can enroll in the university's student health plan, which covers you locally. Or you can look at marketplace plans in the state where you attend school.

Student Health Insurance Plans (SHIPs)

Many colleges and universities offer their own student health insurance plans, commonly called SHIPs. These plans are designed specifically for students and are usually underwritten by a private insurance company in partnership with the school.

SHIPs typically include access to the campus health center and a network of local doctors, hospitals, and specialists near the university. Premiums are usually added to your tuition bill. Many schools automatically enroll all full-time students and allow you to waive coverage if you can show you already have comparable insurance.

Pros of SHIPs

• Coverage is local to campus, so you have in-network access where you live and study.
• Plans must meet ACA requirements, so they cover essential health benefits and preventive care.
• Enrollment is simple and handled through the school.
• The campus health center may be included with low or no copays.

Cons of SHIPs

• Premiums can range from $1,500 to $4,000 or more per year, which adds to the cost of attending school.
• Coverage may be limited during summer break or when you are away from campus.
• The network may be narrow, with limited specialist and hospital options.
• SHIPs are not eligible for ACA premium tax credits.

SHIPs make the most sense for out-of-state students whose parent's plan does not provide good local coverage. If your parent's plan covers you well near campus, you can usually waive the SHIP and save the premium.

ACA Marketplace Plans for Students

If you are not on a parent's plan and your school does not offer a SHIP, you can buy health insurance on the ACA marketplace at HealthCare.gov. Marketplace plans are available during the annual Open Enrollment Period and through Special Enrollment Periods if you have a qualifying life event like losing other coverage.

Marketplace plans offer several advantages for students. They cover essential health benefits including mental health, preventive care, and prescriptions. Income-based premium tax credits can make coverage very affordable. If you are a student with little or no income, you may qualify for significant subsidies or even Medicaid.

If you are under 30 and cannot afford other coverage, you may qualify for a Catastrophic plan on the marketplace. These plans have very low premiums but high deductibles. They cover three primary care visits and preventive care before you meet the deductible and provide a safety net for major medical events.

Medicaid for College Students

Medicaid is a government health insurance program for people with low income. Many college students qualify, especially in states that have expanded Medicaid under the ACA. In expansion states, single adults with income up to 138 percent of the federal poverty level are eligible regardless of student status.

If you are a full-time student with little or no income, you may qualify for Medicaid in the state where you attend school. Medicaid covers doctor visits, hospital care, prescriptions, mental health, preventive care, and more, usually with little or no cost-sharing.

You can apply for Medicaid at any time of year through your state's Medicaid office or through HealthCare.gov. If you do not qualify for Medicaid, the marketplace will determine if you qualify for premium tax credits on a marketplace plan instead.

University Health Centers

Most colleges have an on-campus health center that provides basic medical care to enrolled students. These centers are a convenient and affordable resource, but they are not a substitute for health insurance.

Campus health centers typically offer:

• General doctor visits for illness and injury
• Flu shots and other vaccinations
• Mental health and counseling services
• Basic lab work and screenings
• Sexual health services and contraception

Services at the campus health center are often free or available at a very low cost because they are funded by student health fees included in your tuition. However, the health center cannot handle emergencies, surgeries, hospitalizations, or complex specialist care. For those situations, you need actual health insurance.

What to Look for in a Student Health Plan

When comparing health insurance options as a student, pay attention to these factors.

• Network coverage near campus. Make sure the plan has in-network doctors, urgent care centers, and a hospital near your school.
• Mental health coverage. Mental health is a major concern for college students. Make sure your plan covers therapy and counseling with accessible providers.
• Prescription drug coverage. If you take medications regularly, check that they are covered on the plan's formulary.
• Coverage during breaks. Some student plans may limit coverage when you are away from campus during summer break or holidays. Check whether the plan covers you year-round.
• Total cost. Consider the premium plus potential out-of-pocket costs like deductibles and copays, not just the monthly or annual premium.

Out-of-State Coverage Considerations

If you attend college in a different state from where your parents live, coverage can get complicated. The key question is whether your health plan has in-network providers near campus.

• National PPO plans generally work well across state lines because they have providers nationwide. You may still pay more if you go out of network.
• Regional HMO and EPO plans are a problem for out-of-state students. These plans only cover care in a specific geographic area. Routine care near your campus would be out of network or not covered at all.

If your parent's plan does not work in the state where you attend college, consider these options: enroll in the university's SHIP, apply for Medicaid in the state where you go to school, or buy a marketplace plan in that state. Emergency care is covered everywhere regardless of network, but you should have good coverage for routine visits and non-emergency care near campus.

Gap Year Coverage

If you take a gap year before, during, or after college, you still need health insurance. A gap year does not exempt you from the need for coverage. Accidents, injuries, and illnesses can happen at any time.

If you are under 26, staying on a parent's plan is the simplest option. The ACA's under-26 rule does not require you to be a student. If you are not on a parent's plan, you can buy coverage on the ACA marketplace or check if you qualify for Medicaid. If you are traveling internationally during a gap year, consider travel health insurance, which is a separate product that covers medical emergencies abroad.

Aging Off a Parent's Plan at 26

The under-26 rule ends when you turn 26. The exact date your coverage ends depends on the plan. Some plans end coverage on your birthday. Others end coverage at the end of the month or at the end of the plan year in which you turn 26. Check with the plan to know your exact end date.

Losing coverage at 26 qualifies you for a 60-day Special Enrollment Period on the ACA marketplace. This means you can enroll in a marketplace plan without waiting for Open Enrollment. You should start shopping for plans a month or two before you turn 26 so you are ready to enroll immediately and avoid any gap in coverage.

Other options when you age off your parent's plan include employer-sponsored coverage if you are working, Medicaid if your income qualifies, and COBRA from the parent's plan, though COBRA is typically expensive for this situation.

Dental and Vision Coverage for Students

Dental and vision coverage are separate from medical health insurance for adults. If you are on a parent's plan, your dental and vision coverage usually continues until you age off at 26 as well. If you are on a student health plan or marketplace plan, dental and vision may not be included.

If you are under 19, ACA marketplace plans are required to include pediatric dental coverage. For students 19 and older, dental and vision are optional. You can buy standalone dental and vision plans, or you can use the campus health center for basic services if available.

Many campus health centers offer basic dental cleanings and eye exams at low cost. Some university SHIPs include dental and vision benefits. Check what is available at your school before buying separate coverage.

Choosing the Right Option

Here is a simple way to decide which option is right for you.

• Under 26 and parent's plan covers you near campus: Stay on parent's plan. Waive the SHIP if possible.
• Under 26 but parent's plan is an HMO in a different state: Consider the university SHIP or a marketplace plan in the state where you attend school.
• Not on a parent's plan and have low income: Apply for Medicaid first. If you do not qualify, check marketplace subsidies.
• Turning 26 while in school: Enroll in a marketplace plan, Medicaid, or your school's SHIP before your parent's coverage ends.

The Bottom Line

Every college student needs health insurance. The right option depends on your age, income, where you go to school, and what coverage your parents have. For most students under 26, staying on a parent's plan is the easiest and most affordable choice, as long as the plan covers you near campus. When that does not work, student health plans, marketplace coverage, and Medicaid provide alternatives.

Do not skip health insurance just because you feel healthy. Young adults are not immune to accidents, injuries, or unexpected illnesses. The cost of even one emergency room visit or hospital stay without insurance can create financial problems that follow you for years. Having coverage gives you access to care when you need it, protects your finances, and lets you focus on your education.