Health coverage is typically limited by location – either because of the health plans themselves or due to provider networks or state regulations. As a result, heading to college or setting off on your own can have implications for your health insurance coverage.
“Whether you’re heading off to college yourself, or sending your child out into the world, it’s important to find out if your existing health insurance coverage will still meet your needs, or those of your child,” said
Here are five tips for shopping for health insurance coverage:
Understand your rights
The Affordable Care Act (ACA) made certain guarantees that improved access to affordable health insurance coverage for young adults. Under the ACA, young adults can stay on a parent’s health insurance plan until they turn 26.
“This applies whether they’re enrolled in school, counted as their parent’s tax dependent, have an offer of coverage from their own employer, or even if they’re married. Young adults can remain on a parent’s health plan until age 26, period,” said Norris.
Consider your options
There’s more than one way for young adults to find health insurance coverage:
- Parent’s group health insurance plan. Staying on a parent’s plan may be the best alternative if the parent will still pay a “family” rate for their health insurance even if the young person drops off the plan, if the student is staying close to home, or if the plan will adequately cover the young adult’s care at a new location.
- College plans. Many universities offer student health insurance plans. In most cases, these plans are regulated by the ACA and cover the 10 essential health benefits with no annual or lifetime benefit maximums. Schools that self-insure their student health plans can make their coverage ACA-compliant, but they are not required to do so. Keep in mind some plans marketed to students by outside entities are actually short-term policies that don’t have to comply with ACA regulations.
- Marketplace coverage. Young adults can shop for their own health insurance plans during the ACA’s annual open enrollment period, which runs from
Nov. 1 to Jan. 15in most states. These plans are all ACA-compliant, which means you have a guaranteed level of coverage. If you move or have another qualifying life event, you may also qualify for a special enrollment period and be able to sign up for coverage before the next open enrollment period.
- Medicaid. Medicaid may be available for some students with qualifying incomes. Under the ACA, 38 states and the District of Columbia expanded Medicaid eligibility to adults with incomes up to 138% (higher in D.C.) of the federal poverty level. You can check your eligibility by using this federal poverty level (FPL) calculator.
Take advantage of cost savings
For each available health insurance option, there will be tradeoffs in the cost of the policy, coverage benefits, provider networks, cost-sharing obligations and prescription drug access. For some students, it will be more affordable to stay on a parent’s health insurance plan or take advantage of access to a college plan. However, if you choose to purchase insurance through the marketplace – particularly if you are no longer claimed as a dependent on a parent’s tax return – you may have access to premium tax credits, or subsidies, to offset the cost of your health plan. In fact, 86% of the people who were enrolled in exchange plans nationwide as of early 2021 were receiving premium subsidies.
Some young adults may qualify for Medicaid, particularly if they’re in a state that has expanded Medicaid eligibility. The Medicaid eligibility threshold is tied to the federal poverty level, which generally increases each year.
Where you live is also an important consideration for your health coverage benefits and access to a provider network covered by your insurance. Getting care from out-of-network physicians, hospitals or other health care providers who do not participate in an insurer’s provider network can increase your cost for services. While staying on a parent’s plan might appear to be more affordable, network restrictions on the family plan could result in little or no access to non-emergency health care if a student relocates for school.
If network access is a concern for a young adult student, it’s worth checking to see if the school offers a student health plan. And each state has its own exchange where you can purchase ACA-compliant health insurance plans that offer coverage in your area.
The state where you live will also determine your eligibility for Medicaid.
Consider additional needs
Each health plan is different, and doing your research can ensure you have a plan that will cover your care and prescription drugs.
- Birth control and maternity care. Young adults who remain on a parent’s plan may not have full maternity coverage. Likewise, student plans offered by religiously affiliated schools may have limited coverage for contraceptives. These are details that can be helpful to understand when deciding on a health insurance plan.
- COVID-19. COVID-19 treatment is generally covered by most health plans as an essential health benefit. But bear in mind that each health plan can impose its own cost-sharing requirements, including copays, deductible requirements or coinsurance costs.
- Traveling abroad. Most health insurance plans generally don’t cover foreign travel. If you (or your student) plan to travel or study abroad, there are many travel health insurance coverage options available, many of which cater specifically to students.
“When you’re planning for your future, health insurance coverage is an important consideration, not only for your health, but also for your finances,” Norris said. “When you’re young and healthy, it can be tempting to pass on health insurance. But when you look at the cost of coverage compared to the cost of a single accident or injury, not to mention a serious illness, it’s easy to see the value of at least some health insurance coverage.”
You can compare health insurance options by visiting your state’s health insurance marketplace, also known as a health insurance exchange. You can also learn more about how to buy health insurance and get answers to frequently asked questions for students and young adults by visiting healthinsurance.org.
Healthinsurance.org provides free online resources for consumers, including information about individual health insurance, major medical insurance and affordable medical insurance.