By Sandra Block, USA TODAY
Unless your soon-to-be-roommate mentioned on Facebook that she has a mysterious and potentially contagious rash, you probably haven't given much thought to what you'll do for health insurance when you start college this fall.
But choosing health insurance coverage could be one of the most important decisions you'll make. Without adequate health insurance, an accident or serious illness could saddle you with thousands of dollars in medical bills and force you to drop out of school. And even if you think you're invincible, you may not have a choice: 30% of colleges and universities require students to have health insurance as a condition of enrollment, according to a 2008 study by the Government Accountability Office.
Here's a look at your options:
•Your parents' employer-provided plan. More than two-thirds of college students are covered by their parents' plans, and even more could be eligible for that type of coverage next year. Under the health care reform bill signed into law in May, college students and other young adults who aren't covered by an employer-provided plan can remain on a parent's plan until age 26.
For insurance plans that operate on a calendar-year basis, the requirement doesn't take effect until Jan. 1, 2011, but some large insurers have extended coverage ahead of the deadline.
Pros: You'll receive more generous coverage than you can get anywhere else, says Bryan Liang, executive director for the Institute of Health Law Studies at the California Western School of Law in San Diego. And your parents' group plan can't exclude you for having pre-existing health problems.
"If you can get on your parent's plan, take advantage of it, because employer-based coverage is the best coverage" you can get, Liang says.
Cons: If you attend college far from home, you may not have access to providers who participate in your parent's plan, says James Turner, director of the student health service at the University of Virginia and immediate past president of the American College Health Association, an advocacy group for college health professionals.
Suppose, for example, that your parents live in Seattle, but you decide to attend college in Charlottesville, Va. If the campus doctor refers you to a specialist, there's a good chance the individual will be outside your plan's network, which means you'll have to pay a higher deductible and co-insurance.
•Your college's health insurance plan. More than half of colleges and universities sponsor their own health insurance plans for students, according to a 2008 report by the GAO.
Pros: If you don't have access to a parent's plan, your college's plan could offer a low-cost source of coverage. Annual premiums for student health insurance plans range from $30 to $2,400, and the average premium is about $850, the GAO said.
Cons: School-sponsored plans do a good job of handling immunizations, colds and flu, because their priority is to keep diseases from spreading across campus, says Joel Ohman, a financial planner and founder of Insurance Providers, an insurance brokerage website. But in many cases, he says, they
don't do a good job of covering major medical problems.
For example, many college plans analyzed by the GAO had coverage limits for specific conditions. More than half of the plans had a maximum benefit amount of $30,000 per condition, and 35% had a cutoff of $50,000. Either limit could leave you on the hook for thousands of dollars if you developed a serious illness.
In addition, some plans contained additional caps on the amount they would pay for a specific service or set of services, the GAO said. For example, one plan limited lifetime coverage for all outpatient services — including doctor's visits, X-rays, lab fees and chemotherapy — to $1,200 per condition, the GAO said. A student diagnosed with cancer could hit that limit on the first day of treatment, Liang says.
In April, New York Attorney General Andrew Cuomo charged that many school-sponsored plans provide generous profits to insurance companies while putting students at risk. An investigation by Cuomo's office found that, in addition to low coverage limits, some plans excluded students with pre-existing health problems, or charged them a higher premium. Others failed to cover prescription drugs or placed limits on drug coverage, Cuomo said. And some plans had per-illness caps as low as $700, Cuomo said. Cuomo's office looked at 65 policies offered by colleges and universities in New York, along with some out-of-state schools attended by New York residents.
Before enrolling in your school's plan, spend some time going over the specifics. A college health plan should provide catastrophic coverage of at least $250,000 and ideally $500,000, Turner says. It should also provide coverage for prescription drugs, mental health care, preventive care and medical evacuation for students who study abroad, he says.
•Individual insurance plans. These plans are available through websites such as eHealthInsurance.
Pros: Premiums for young, healthy adults are usually affordable — as low as $600 a year in some cases, Liang says. You may have a wider choice of providers than is available through your school's health plan. And if you won't be eligible for your parent's plan until next year, an individual plan could provide short-term coverage at a relatively low cost.
Some insurers are offering individual plans targeted at students who don't have insurance through their parents but aren't happy with their school's plan. College Parents of America, a Virginia-based non-profit, recently launched GradGuard, an individual insurance plan that offers broader coverage than most college plans. The plan covers up to $500,000 per condition. Annual premiums range from $1,464 to $1,848, depending on the deductible.
Cons: Deductibles and co-payments may be higher than those for a college-sponsored health plan. If you have chronic health problems, such as asthma, you may not be able buy an individual insurance plan, at least not at a price you can afford. The health care reform bill prohibits insurers from denying coverage to people with medical conditions, but that provision doesn't take effect until 2014.
You can find more information about individual insurance plans and other options for the uninsured at HealthCare.gov.