insurance

Campus health insurance or family plan?

Family plans: what works, what hurts

Olson sees the COBRA option as the most important benefit of a student staying on a family insurance plan. Unfortunately, many graduates are no longer eligible as dependents under those plans.

Another major advantage applies to families with two or more children: Premiums typically are charged for "one or more" children, Olson says. So removing a college-aged child from the policy wouldn't reduce the premium at all.

"Being able to actually utilize the insurance coverage they already have bought and paid for" would be a major pro of staying on the family plan, says Boyle -- "if schools accepted private health insurance (and unfortunately, very few do)" at the campus health center.

Making sense of apples to oranges

No matter what, choosing a plan requires doing your homework. Check:
  • What's covered -- and what isn't.
  • Co-payments.
  • Co-insurance levels.

Determine if the policy covers travel to and from school, study abroad programs and possible internships. Besides reviewing the school's literature and Web site, visit its health center and consult school health insurance staff for guidance.

Keep in mind that campus health centers vary in structure, Rubin says. A large university's center may run like a regular doctor's office, billing students' insurance companies. A smaller college may have more of an infirmary, sending any student who's really sick out to a doctor's office.

Also speak with the family's insurance provider to confirm that the child would remain covered while in college, says Tracey Baker, a Certified Financial Planner and co-author of "Navigating Your Health Benefits for Dummies."

When considering a lower premium plan, which might seem like the best way to save a few bucks, be sure to consider how much more you could potentially pay if something were to happen, says Baker, who is also the adviser to the health benefits education campaign Planforyourhealth.com.

"In any analysis, the devil will be in the details," says Scott Golden, chief financial officer and co-founder of the Maryland-based health benefits firm Golden & Cohen. "If the price is very low, there is a reason."

Annual premiums in the GAO study ranged from $30 to $2,400 and maximum benefits ranged from $2,500 per illness or injury to unlimited lifetime coverage.

"Just bring it down to benefits and try to compare apples to apples, as far as the benefits ... and the comprehensive nature of the plans are concerned," says Mostafaie. "If it's cost-effective, the best bet is to stay on the parents' policy."

That's the popular option. About two-thirds of the 80 percent of college students with health insurance in 2006 were covered through employer-sponsored plans, according to the GAO study.

Independent plans and dual coverage

With limitations in college-offered and family plans, why not just have dual coverage?

It's an option parents recognizing gaps in their current coverage may choose to ensure comprehensive coverage, Grenolds says, but it's not a common practice.

"Do you need two insurances? No," says Rubin. "You need one or the other, unless neither insurance is good and you can afford both." Parents may opt for dual coverage because of out-of-network problems, but Olson cautions, "Most individual insurance contracts typically restrict dual coverage."

Although experts disagree over whether an independent insurance plan for a student is cost-effective -- since the individual pays the full cost of the premium -- it doesn't hurt to explore this option. Typically sold by insurance carriers, these plans can sometimes be purchased directly through the college, says Baker. Seven percent of the students studied by the GAO were covered by a private health insurance plan in 2006.

"The cost might be slightly higher but the benefits outweigh," says Wendy Gold, an agent and broker with Insurance for College Students in Boca Raton, Fla. "With an individual plan the student does not have to carry a minimum number of credit hours, ... can take that plan from college to college ... and can continue with the plan after graduation."

Once again, however, the question is, will the student health center accept this insurance?

Mostafaie's team recently looked at quotes from three cities for a healthy 21-year-old male. "We were able to find plans with deductibles of $2,000 or less with an annual premium of about $600," he says, adding that there are also student-specific individual health plans to consider.

Choose something

On this the experts agree: Don't go uninsured.

College students, or "young invincibles," may argue they don't need health insurance, but "I don't buy it, and neither should parents," says Baker.

"Assume the worst may happen," says Olson, and get the policy that'll serve in the long term if and when sickness or injury occurs. "Money pays the premium -- but it's health that 'buys' the policy."

You can compare health insurance quotes on Insureme.com, a Bankrate company.

Melissa Ezarik is a Connecticut-based freelance writer

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