College Health Insurance: Smart Choice or Overpriced Option?

To waive or not to waive.

Such is a decision most students enrolling in colleges that require health insurance coverage think carefully about.

Do colleges offer health insurance?

Most of them do. At some institutions where one isn’t available, students must enroll with their own plan, whether under their parent’s coverage or, for working students, something their employers offer.

In fact, some colleges automatically enroll students in their health plans if no comparable coverage is available.

But is student insurance worth it?

Student health insurance is worth it, especially given that 86% of college students admit to having poor mental health and 95% are eating unhealthily, which could put their well-being at risk.

Having one is also ideal for those whose current coverage is not comprehensive or has no coverage at all.

But the answer to a more specific question like “Is college health insurance worth it?” depends on how much it costs and what it covers as well as the economic status of an undergraduate student’s family.

With the average cost of college student health insurance ranging from $2,000 to $5,000 or even higher, it’s worth looking into the matter thoroughly before deciding to enroll in what your institution offers or waive it.

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Insurance Plans Can Vary From College to College

Consider two things when determining the answer to the question, “Is student health insurance good?”:

  • Cost
  • Coverage

Like tuition, institution-sponsored health insurance plans vary in cost.

In most instances, the smaller and/or the less expensive the school, the lower the medical coverage of students, although it’s worth pointing out that this is not always the case.

Can’t decide whether to enroll in the coverage your college offers, stay under your parent’s or employer’s coverage, or get your own private or public health insurance?

Compare prices and inclusions.

Some Student Health Insurance Plans May Cost an Arm and a Leg

As far as student health insurance costs go, colleges are not the same.

Some have higher plan fees but offer more coverage, while others have lower insurance fees but may exclude some services college students may or may not need.

Either way, college health insurance plans comply with the provisions of the Affordable Care Act (ACA).

Your choice, in the end, usually boils down to which option you can afford the most.

To have an idea of what student health plan costs, let’s look at the annual cost of student insurance plans at some liberal arts schools US News ranks, arranged by asking price:

Liberal Arts InstitutionHealth Insurance Annual Fee
Barnard College$4,304
Wellesley College$4,051
Vassar College$3,580
Smith College$3,148
Bowdoin College$3,063
Claremont McKenna College$2,996
Amherst College$2,934
Carleton College$2,888
Pomona College$2,868
Wesleyan University$2,661
Harvey Mudd College$2,570
Davidson College$2,525
Hamilton College$2,483
Williams College$2,445
Grinnell College$2,172

Coverage May Vary From One Student Insurance to the Next

Is college health insurance worth it?

Besides the cost, another determinant as to whether or not college-sponsored health insurance is worth your money is the coverage or inclusions of the plan, which tend to vary from one institution to the next.

These are the coverage highlights of Harvard University’s campus health insurance:

  • Ambulatory surgery
  • Emergency room visits
  • Mental health care
  • Specialty care
  • Pediatrics
  • Diagnostic laboratory or radiology services
  • Hospitalizations
  • Obstetrics or gynecology care
  • Prescription drugs

Harvard points out that there are limitations to mental health and specialty care services.

It adds that the plan it sponsors does not include routine preventive medical examinations, which the Student Health Fee covers, for students or members who are 18 years of age or older.

The student health plan Harvard offers costs $5,528 annually, and here’s the breakdown:

Student health fee$1,408
Student health insurance plan$4,120

On the other hand, here’s a list of the coverage highlights of the student health plan at Dartmouth College:

  • Prescription drugs
  • Preventive care
  • Emergency room services
  • Mental health care
  • Substance abuse treatment
  • Home health care services
  • Specialty care

It’s a must to point out that Dartmouth’s health insurance for its students does not cover everything entirely.

While preventive care services get 100% coverage (out-of-network services not covered), they cover only 90% of outpatient mental health care in-network and only 80% out-of-network.

On the other hand, it covers 100% of both in-network and out-of-network emergency room services, although only after the student pays $100 as a co-payment.

Annually, the cost of a student health plan at Dartmouth is $4,163.

College Health Insurance vs. Other Health Plans

college healthcare

Is college or university health insurance good?

For students who have no current coverage and find that the cost of enrolling in an institution-sponsored plan, the answer is typically: yes, it’s a great way to have medical insurance.

However, those from low-cost backgrounds or who are looking for more flexibility because of chronic health issues or the need for medical treatments unique to their circumstances may find them daunting or insufficient.

Exploring other options, in this regard, may be best instead of making do with what a college offers.

In this part of the post, we’ll take a quick look at the following common alternatives:

  • Public health insurance
  • Private health insurance
  • Parent’s health insurance
  • Employer’s health insurance

Public Health Insurance: The Cheapest, But Not All Qualifies

Medicaid is the US public health insurance program, covering over one in five Americans.

Not all degree-seeking individuals are eligible for Medicaid — only around 13% of college students are on Medicaid.

It means those who do not meet eligibility requirements have no choice but to explore other health insurance plans for college students when looking for an alternative to a school-sponsored one.

Being independent and living on your own may make you qualified to get free coverage via Medicaid.

Medicaid isn’t cost-free for college students as having coverage under their parent’s insurance.

However, it’s the cheapest option available, with monthly premiums usually ranging from $1 to $20 or 2% of household income.

Each state has its own Medicaid program, which means it’s best to enroll in one where your college is.

You won’t be able to take advantage of in-network benefits if you seek treatment out-of-state.

It also goes without saying that you will lose public health insurance coverage if you move to a different state to attend another postsecondary institution or start your career there.

government healthcare

Though Flexible, Private Health Insurance is Expensive

Before anything else, I would like to get one thing clear.

Private health insurance and personal health insurance are the same: having one means coverage of eligible health care expenses in exchange for paying monthly or annual premiums.

What’s so wonderful about private health insurance is that it gives you more choices and flexibility in terms of who provides the treatments you need and when you get them.

However, it’s usually the costliest among options.

Average monthly premiums for individuals 21 years of age range from $374 to $451.

For young individuals like college-level students with usually no chronic health issues, especially those from low-income backgrounds, paying steep premiums may be a crucial concern.

Parent’s Health Insurance: The Best Option in Most Instances

What is good health insurance for college students?

In most instances, the best answer to this question is their parent’s health insurance.

Staying on your parent’s plan is the most cost-effective way to have coverage as a college student.

It can also give you peace of mind that you won’t lose your insurance if you switch colleges or after you graduate.

You will remain covered when hopping from one job to the next while still in college or as a fresh bachelor’s degree holder, a matter we will discuss further shortly.

Unfortunately, the perks stop with money-saving advantages and flexible coverage.

You can stay covered by your parent’s health plan only until you turn 26 years old, although most young adults are through with college and starting their careers by that time.

Starting a family while under it also won’t cover your dependents.

Employer’s Health Insurance for Working College Students

Employer-based health insurance falls under two broad categories:

  • Non-contributory plan. This health plan does not require you to pay premiums to take advantage of the benefits. Instead, your employer takes care of the premiums completely.
  • Contributory plan. This health plan requires both employer and employee to contribute. Contributions can be equal or according to a pre-decided percentage, which entails the employer contributing 80% of the premiums, on average. Either way, the employee’s contribution is often via salary deduction.

Some of the top advantages of an employer’s health insurance include compliance with the law, lucrative tax benefits, and better coverage than most other health plans, such as the inclusion of pre-existing conditions.

For a college student, employer-based health insurance entails added costs.

Of course, this type of health plan ends your coverage when you change careers or employers.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily represent those of the College Reality Check.

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