The summer months and the period following graduation can leave some college students and recent graduates scrambling to find affordable, year-round health insurance if they lack coverage under a school or parent’s health plan.
A nationwide poll by AgileHealthInsurance.com revealed that more than 70 percent of college students and recent graduates reported having difficulty finding affordable insurance coverage. Many students cited expensive premiums and high out-of-pocket costs as impediments to affordability.
“Uninsured students and graduates face significant and enduring education-related costs and, as a direct result, have very limited budgets for health insurance coverage,” said Bruce Telkamp, founder and chief executive officer of AgileHealthInsurance.com. “Our research in this area has consistently shown that unless they can find major medical insurance for under $100 per month, most will forgo health coverage and become uninsured.”
For the nearly four million students graduating from higher education institutions and the 20 million students on their summer break, the cost of health insurance can be a burden, particularly for low-income students or graduates who face impending student loan repayments, the company said.
The penalty for not having health insurance in 2018 is 2.5 percent of household income or $695 per adult, whichever amount is higher.
AgileHealthInsurance.com is a company that educates consumers on the availability of private market health insurance options that are alternatives to Affordable Care Act plans. The company markets short-term health insurance plans as an “optimal” and affordable choice for students lacking coverage during the summer months or for graduates waiting for job-based benefits to begin.
However, health insurance policy experts recommend that students or recent graduates select an insurance plan based on their available financial resources and a plan’s coverage.
“Insurance and medical care is expensive, and so having these income-related programs that can help lower those costs are really critical,” said Dr. Linda J. Blumberg, an Institute Fellow in the Health Policy Center at the Urban Institute.
Low-income students may benefit from insurance options through Medicaid as many states have expanded their eligibility requirements. Currently, 33 states and the District of Columbia have expanded Medicaid to low-income residents.
“A lot of students might be surprised to learn that if they’re on their own – they’re not a dependent of their parent anymore – they might be eligible for Medicaid depending on what state they’re in,” said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute.
“Medicaid is not just a more affordable option for students, but [it is] much more generous and comprehensive in coverage than what you might be able to get under a student health plan,” Corlette added. This option “would not expire at the end of the school year.”
Added Blumberg: “Medicaid is very comprehensive and generally has no premiums and no cost sharing or very low premiums or cost sharing associated with it,” she said. “So that’s really the best deal.”
A second option for students and recent graduates under age 26 is joining a parent’s private health insurance plan, typically offered through the parent’s employer.
“Those policies generally come with cost-sharing requirements and if the parents aren’t covering another kid or don’t have a family policy already, then there’s probably going to be an extra premium associated with covering the new graduate,” Blumberg said. “But that can be depending upon the employer and what the plan is. It could be quite good coverage and very affordable because the employers often make a significant contribution to the costs as well.”
A final option for students and recent graduates is securing health insurance through private, non-group insurance markets. Since young adults tend to not start out with high incomes, financial assistance for health insurance is available in every state.
“Depending upon your income, you could qualify for assistance in paying the premium,” Blumberg said. “If your income is below 250 percent of the federal poverty level, you’re also eligible for subsidies that lower your out-of-pocket costs like your deductibles and co-payments.”
Many students, parents and education advocates argue that colleges should share information earlier with individuals about financial aid, degree credentials and more. Including information on health insurance coverage in these conversations beyond an option to opt in or out of a school’s health plan will benefit students seeking coverage.
Blumberg said, “It would be useful at that same moment – when the schools are telling kids and parents that they need to buy the school-connected plan or show evidence of other coverage, that they provide a list of options, such as:
- Depending upon your family income and state rules, you may be eligible for comprehensive, low or no cost insurance coverage through the Medicaid or Children’s Health Insurance program. Details on eligibility requirements for these programs can be found through your state government’s Department of Health.
- Depending upon your family income, you may be eligible for financial assistance to purchase insurance coverage through a state marketplace or exchange. You can find information on these options through Healthcare.gov.
- Students with a parent who has employer-sponsored insurance can stay on their parents’ policies up until age 26.”
Many universities also require a student’s outside insurance plan to cover health care providers in the area of the institution, Blumberg said, noting that students need to be aware of this as they are exploring their insurance options.
“I would have the universities provide this information to students as they graduate too, to encourage them to remain insured as they enter the real world.”
Tiffany Pennamon can be reached at firstname.lastname@example.org. You can follow her on Twitter @tiffanypennamon.