Tips for Buying a Students Individual Health Insurance Policy

Congratulations! Your kid is entering a program of higher education. Of course, you want him to support you in your old age, the way you supported him for the last 18 years. Better make sure the kid is not saddled with huge medical debt before he or she gets a real job. There are a lot of options out there, each with advantages and shortcomings. This is a very general overview of common options.

If you have medical insurance at work you can probably keep your student on your plan. Check your handbook regarding dependent students. You need to be very careful, however. Understand exactly what will qualify or disqualify your student. The policy will specify a maximum age, often age 23 or 25. Additionally, the dependent must satisfy the definition of a full-time student at his or her institution of higher education. If the school requires 16 credit hours per semester to qualify as a full-time student and Chauncey, Jr. drops a four credit biology course (after flunking the mid-term exam) he will not be considered a full time student during that semester. The insurance company has no way of knowing the student’s status (sometimes the parents don’t even know!). When Junior’s claim for a compound fracture while skiing on spring break hits the claims department, a letter may be generated requesting verification of full-time student status AT THE TIME OF THE ACCIDENT. You don’t need to be clairvoyant to see what’s coming next.

A safer way to provide coverage for your student may be COBRA if you have medical benefits at work. Eligibility becomes a function of time- 36 months. Student status is not a factor. Your student will be billed at the same rate as a single employee, with no contribution by your employer. Check for sticker shock. One option is to get Junior safely covered under COBRA and then seek other alternatives if it costs too much.

One of the safest ways to provide medical insurance coverage for your student is an individual major medical plan, through a commercial insurance company or your local Blue Cross/Blue Shield association. Your student must be healthy enough to qualify for the coverage. This is not to say that there must be a pristine medical history with no “blips”; but anticipated medical expenses above what is considered “normal” may disqualify the student. A big advantage of going this route is the policy will be your student’s. It won’t have anything to do with student or dependent status. Your student may keep the coverage forever. In addition, the cost of individual policies is typically lower than employer plans. You select the level of coverage based on your needs. Young people typically have low medical bills. It makes sense to purchase coverage that will start paying benefits after you’ve paid a specified dollar amount out of your own pocket. You select the dollar amount. Smaller medical bills can be budgeted: a co-rec football sprain or streph throat, for example. Where you really need insurance is for the really big bills.

Most schools offer medical insurance for students at very attractive rates. Pay attention to what is covered. Usually benefits are very good for smaller medical bills, but limit hospital coverage. While it’s true that young people usually don’t incur large medical expenses, a surgery as common as an appendectomy may quickly exhaust hospital benefits under these policies.

Federal and state legislation makes it likely you will be able to find appropriate, affordable medical coverage for your student, even if he or she has pre-existing medical conditions. However, the selections can be confusing. Contact a licensed professional. A professional will be able to help you sort out all your options. Typically your payments will be the same whether you use an agent/broker or wend your way through the tangled mess yourself.