Are you a college student (or graduate student) looking for cheap health insurance options?
Maybe you’re going to college for the first time, or maybe you’re an older student who no longer gets healthcare under your parents’ insurance?
If so, this guide explains what your options are, and when you should consider these options.
parent’s health insurance
If you are under 26 (or 29 in New York), your parents can generally put you on their insurance plan. Generally, if you’re going to school in the state, your parents’ health insurance plan will cover all of your medical needs. If paying for you isn’t a financial hardship for your parents, it may be an affordable way for you to stay covered.
But before you decide if this is definitely the coverage option for you, consider a few drawbacks. Many health insurance plans are state-specific, and in-network doctors may be limited to a few near your parent’s hometown. Out-of-state students may want a separate or supplemental insurance option. This may be especially important to consider if you have a chronic condition that may require regular appointments.
Another drawback of being on your parents’ insurance is the cost to your parents. Some parents may not be able to pay for your insurance. Before assuming that your parents are prepared to cover you, have an open conversation about the costs and whether your parents can handle them. If you got a decent job while you were in school, you may want to consider getting your parents reimbursed for the cost of keeping you covered.
school sponsored insurance
School-sponsored insurance programs are often suitable for international students who need health insurance coverage in the United States. Plans tend to be quite affordable, and coverage at on-campus medical centers can be free or very affordable, once the premium is paid. Coverage tends to run from the beginning of a semester to the end of it (with an overlap of a few weeks).
However, school-sponsored insurance plans are not perfect. If you need to see a specialist, the specialist may not be covered or may only be covered at a higher rate. Some school insurance plans allow you to add dependents (including your spouse or children), while others do not.
Additionally, school-sponsored insurance is not always the most cost-effective option, especially for students who need insurance for a spouse or dependent children. Before purchasing school-sponsored insurance, be sure to compare the plan against the alternatives. Even if you are eligible for school-sponsored insurance*, you (and your spouse and children, if applicable) may be eligible for health insurance subsidies or even free health insurance.
For example, you may qualify for free health insurance (Medicaid) if you are a legally “independent” student with a low income. Additionally, students who are also parents may find that children qualify for CHIP (Medicaid for Children). Before enrolling in your school health insurance plan, be sure to fill out an application at the health care exchange (HealthCare.gov or your state’s equivalent) to find out the cost of the options available to you.
*It is common for graduate students to receive paid health insurance as part of their scholarship. Health insurance is usually classified as student health insurance rather than employer-sponsored health insurance. This means that students and/or their dependents are eligible for subsidized or free health insurance. However, you should double-check that your insurance is considered school-sponsored insurance and not employer-sponsored insurance. If it’s employer-sponsored insurance, you won’t be eligible for some subsidies.
If no one claims you as a dependent on your taxes, and you don’t live with your parents, you may qualify for free health insurance through Medicaid. Medicaid is usually reserved for people with low incomes (which includes many college students who are primarily focused on their studies). Your ability to qualify for Medicaid will depend on whether you are a dependent (according to tax standards), whether you live with your parents, your income, and other factors.
If you are a student who has a spouse or children, your spouse or children may qualify for Medicaid, even if you obtained your insurance elsewhere. You can apply for Medicaid through the Federal Healthcare Exchange or your state’s exchange.
For high-income students, and those who live outside their parents’ state, purchasing health insurance through a healthcare exchange may be their best option. When you purchase insurance through a healthcare exchange, you may qualify for a premium tax credit.
Your premium tax credit depends on a few factors:
Your household income (which includes your parent’s income if you are a dependent) The size of your household (including your parents if you are a dependent) Are you eligible for employer-sponsored health insurance in your state
If you don’t have employer-sponsored insurance, and your parents’ insurance isn’t your best option, a plan through a health care exchange may be a good option for you.
catastrophic coverage plans
Are you healthy, under 30, and a high income earner? If so, a perishable health insurance plan (available through healthcare exchanges) may be a good option for you.
Destructive plans have significantly lower monthly premiums (but you cannot use the premium tax credit to reduce premiums), but have much higher deductibles. The plans cover some preventive expenses, but you will have to pay most of the medical expenses out of pocket.
While the high deductible is a major drawback to these plans, they may make sense for high earners who need to purchase their own health insurance. Just make sure it really is your best insurance option.
Often, a school-sponsored health insurance plan will provide better coverage at the same or even less cost. And, if your income is below 400% of the federal poverty line ($49,960 for an individual in the lower 48 states), you’re probably better off purchasing a traditional insurance plan through health care exchanges.
The last type of insurance for college students is an employer-sponsored health insurance plan. Many large employers offer health insurance as a benefit to employees who work full-time or part-time. Depending on your work schedule and your employer’s health insurance policies, you may qualify for this insurance.
If you (or your spouse) qualify for employer-sponsored health insurance, you will not qualify for a tax credit through the Healthcare Exchange. However, you may still qualify for Medicaid, school-sponsored insurance, or your parents’ health insurance plan.
The quality and cost of employer-sponsored health insurance plans vary by employer, so be sure to compare your plan (if you have one) with other options.
If you are a side hustler, you can also look into services like Sidecar Health.
health sharing ministry
Health sharing ministries are an alternative to insurance but function in much the same way. These are organizations in which the members of the organization share in the health care costs of the organization.
These ministries are exempt from the individual mandate requirement, and thus if you use one, you do not face a tax penalty. However, these programs require adherence to specific religious or other principals, and may not be suitable for everyone.
You also run the risk of not getting the coverage you need, because you don’t meet certain requirements.
However, most users of health sharing ministries are extremely happy with the cost and care they provide, and it is an incredibly popular option for young adults – especially those who are self-employed or active in the gig economy and Those who do not have access to other insurance. Check out our review of Medi-Share here.