Don’t Risk Your Degree: Why College Students Need Health Insurance
It’s easy to forget about health insurance when you’re busy studying for that next exam, researching your next paper and keeping up with your current and past friends on social media. But college students need health insurance as much as anyone else in our society. And sometimes short term health insurance is the best answer.
- Statistics show that nearly 15 percent of individuals age 18 to 25 are uninsured, and 18.5 percent of those age 26 to 34 are uninsured, which is significantly higher than the national average.
- A recent study showed that 69 percent of students who attended but did not graduate from college said that having health insurance would have helped them “a lot” in getting a college degree.
Being without affordable health insurance while you are in college is a risk you shouldn’t take. You could be forfeiting your plans and dreams for your future.
Why College Students Need Health Insurance
You’re young, in good health and feeling great. So why should you spend any of your limited money on health insurance now? That’s a question that many college students have, and it is a very good question.
Insurance is one of those purchases that isn’t sexy or trendy. It’s a staple necessity, like a driver’s license. A driver’s license allows you to drive legally on all the streets and roads in the nation. Health insurance allows you to worry less about risks that could sink your plans for the future. As a college student, many times a temporary short-term health insurance policy can be the right solution.
Say you have an accident and break your leg. Or you get really sick for an extended length of time (even though you feel great today and can’t imagine being seriously ill). Besides missing classes during the time needed to recover, you’ll be stacking up medical bills that you may not be able to pay.
Do you really want to risk adding large medical debt to any student loan debt you may have or the expenses you’ll be faced with while you are looking for a job after graduation? Some students who fall ill or have serious accidents need to drop out of college and may never return but are left with huge medical debt.
4 Reasons You May Need Temporary Health Insurance
Let’s face it: You expect to have a job that provides health insurance when you graduate, so you’re looking for health insurance for a short period of time. That’s why temporary health insurance, often called short term health insurance, can be the right solution for many college students.
Some college students are on a parent’s health insurance plan, at least until age 26. But a lot of students don’t have coverage on a parent’s insurance plan.
Here are four reasons why you may need term health insurance while you are a college student and after you graduate:
1. Your parents do not have health insurance that offers dependent coverage.
Health insurance is expensive, and it’s getting more expensive for employers. There are many employers that do not offer dependent health insurance to their employees. Many small businesses do not offer health insurance at all.
2. Your parent’s health insurance for dependent coverage is too expensive.
Your parents may be among the fortunate ones that are offered dependent coverage in their employer-sponsored health insurance. But fewer employers are kicking in on the premium cost for dependent coverage. Most employers have focused on subsidizing the employee-only health insurance and pay little, if any, of the premium for spouse and dependent coverage.
So, even if your parent’s employer offers health insurance with dependent coverage, you and your parent(s) may decide that it is just too expensive to pay the premiums.
3. You are age 26 or older, and you are no longer covered on a parent’s health insurance.
As you may know, once you are 26 years old, you are no longer covered on most health insurance that your parents may have. That’s the cut-off age set by the Affordable Care Act.
You may or may not have completed your college education by that age, so it’s important to consider this now and look ahead, even if you are not yet 25.
4. You are graduating soon and do not know how long it will take for you to land a job.
That dream job—or the job you first take as a stepping stone to your dream job—may be some time in the future, even if you are graduating soon.
If you are on your own, without full financial support from your parents or other family members, you may have a period of time when you are not employed. Or, you may take a lesser job while you are waiting to find a job in your chosen field. In many cases, you may not be offered employer-sponsored coverage because:
- Your job is part-time and not eligible for benefits
- Your employer does not offer health insurance coverage
- You are in a waiting period before you are eligible for health insurance benefits
How Short Term Health Insurance Can Be the Answer for You
There are many reasons why short term health insurance that provides temporary health insurance for you can be the right answer at the right time for college students.
- Short term health insurance plans typically cost one-half the price of individual health insurance plans.
- Short term medical insurance covers doctor visits, hospitalizations, emergency care, lab tests, prescription drug costs and more.
- Unlike enrolling in an individual medical policy, the short term application process is simple, many times providing next-day coverage in a matter of minutes. It’s easy to select a policy, easy to apply, and you will know right away when your coverage starts. Actual coverage can usually begin as soon as the next day.
- You choose the length of time you want for your coverage. You can choose coverage for just a month or up to 364 days, depending on your state of residence.
- Most short-term medical insurance policies are “network-free.” This means you can choose any doctor or hospital. That’s important because when you need medical care, you really want to be able to choose where you go for that care.
Why is this temporary health insurance less expensive than a traditional major medical plan? One main reason is because these plans typically do not cover pre-existing conditions.
- If you are healthy, then this will not matter to you, and you can rely on this insurance in a true insurance fashion: to protect you against unforeseen sickness and injury.
- If you do have a pre-existing condition, you should talk with a licensed professional insurance agent about your options, which may include the public Healthcare Marketplace (Exchange).
Questions You May Have about Term Health Insurance
QUESTION: I am in college and I do not have health insurance. Can’t I just wait until I get a job that provides me health insurance?
ANSWER: You can, but you risk significant medical debt if you have a serious illness or injury that requires health care treatment. The costs of healthcare are increasing. Even a few days in a hospital or treatment and care in an emergency room can cost thousands of dollars. Uninsured people bear the brunt of these costs, since they do not have insurance to stand behind them to reduce what they must pay out of pocket.
Also, consider that the job you get may not offer you health insurance, or there may be a waiting period before such coverage would begin. You are at risk during this waiting period and anytime you are in a job that does not offer health insurance coverage to employees.
Short term health insurance can be a good answer for you in this kind of situation, by providing you coverage for the period of time that you need, at an affordable cost to you. And, you can generally get coverage quickly, to start when you need it.
QUESTION: Does this short term health insurance meet my individual insurance mandate, as part of the Affordable Care Act?
ANSWER: No, short term health insurance does not meet the requirements of the Affordable Care Act for its individual mandate. Because it is not a major medical policy, you may be subject to a tax penalty. However, you should know that the tax penalty will not be assessed if your coverage gap is three months or less. In addition, the tax penalty can only be retrieved from you by the government as a reduction in a federal income tax refund that you may receive. If you are not due a federal income tax refund, the law does not provide for any other way for the government to obtain the penalty from you. The government cannot send you a bill nor take the money from your paycheck.
QUESTION: I am very healthy and have not been sick for a long time, not even a cold. Why should I worry about health insurance now?
ANSWER: That is very good news! Being healthy or remaining healthy is important to all of us. Unfortunately, none of us knows when illness — or an accident — may strike us. If you have known someone who has had this type of experience, you know that medical costs are high and can add a layer of complexity in recovering from illness or injury. None of us want to have to worry about a large financial burden and possible medical debt that we will carry for years when we should be focusing on getting better and stronger.
Short term health insurance can provide you the peace of mind you need, for financial protection from unforeseen serious illness or injury. In fact, short-term health insurance is well-suited to people that do not have current medical conditions, since it provides protection against incidents that we all hope will never happen.
QUESTION: I am covered on my parent’s health insurance right now. They have insurance from their employer. How soon after I turn 26 will that insurance end?
ANSWER: According to the law (the Affordable Care Act), you can be covered on your parent’s coverage until you turn age 26 (if your parent’s health insurance offers dependent insurance coverage and your parent enrolled in this coverage). The legal obligation ends on the day before your 26th birthday, but many insurance companies provide for coverage to extend to the end of the month in which you turn age 26.
Temporary Health Insurance for College Students
Like most other college students, having health insurance will help you be able to concentrate on studying and allow you to take care of medical concerns as you need to, with less worry. Consider a short term health insurance plan to meet your needs now and until you graduate and secure a job with benefits.