Consider individual health coverage for your student
06/26/2012 6:48 PM
05/16/2014 6:49 PM
One thing about health care coverage: It never fails to leave you challenged and confused.
The latest evidence is that many colleges and universities are phasing out or scaling back their school-sponsored medical plans sold to students. Blame it mostly on escalating costs associated with the higher coverage requirements of health care reform.
These school-endorsed plans had offered low-cost but very basic medical coverage to students who for the most part did not have their parents’ employer-provided group insurance as a coverage option.
To complicate things even further, it’s unlikely that the premiums for school-sponsored health coverage will swing quickly in the other direction if the Supreme Court throws out some or all of the Affordable Care Act. That’s because policy contracts with schools are already locked in for the upcoming year.
If you’re in need of a fallback plan before sending your son or daughter off to college, start with individual insurance policies.
About 18 percent of college students are currently covered under an individual policy, according to a survey conducted in April by Kelton Research and sponsored by eHealthInsurance, a consumer-oriented website.
Like any type of insurance, individual policies have their pros and cons. For the most part, the premiums for healthy young adults are affordable — on average about $110 a month, according to the latest data from eHealthInsurance. And many insurers offer several coverage packages for students, ranging from bare-bones basic to blue-chip protection.
But there’s one potentially big catch. If you have a pre-existing medical condition, such as diabetes or asthma, it may result in a higher premium or you may not be able to buy an individual plan.
Still, some pre-existing medical conditions — if they’re being managed well — may not trigger higher costs or an outright denial, according to eHealthInsurance.
There are plenty of individual plans on the market, and websites such as eHealthInsurance can help you compare premiums and coverage.
For example, the nonprofit College Parents of America offers a policy called GradGuard that’s underwritten by the United States Fire Insurance Co.
The insurance covers up to $750,000 per condition and includes prescription drug coverage and several payment options. You must be a member of the association to apply for coverage, although it costs only $20 to join.
One way to keep premiums low is to consider an individual policy with a high deductible. This strategy works best if you’re relatively healthy and don’t visit the doctor often.
But home in on the out-of-pocket limits to make sure you can cover the maximum amount of the tab in case of serious injury or illness.
Some insurers also offer low-cost catastrophic injury coverage. These plans have high deductibles and won’t cover doctor visits and other routine care. But they do protect against expensive medical needs.
As you research your options, experts say your overriding goal should be making sure your student has enough coverage to pay for a serious injury or sudden illness. The last thing you want is to run out of protection when it’s needed most and rack up medical debt.
The reality is that college students are not bulletproof. Accidents and illnesses do happen.