Student health insurance options:
required reading for college-bound

Long before the first class of the first college semester begins, prospective students and their families need to begin doing their homework to ensure that their health coverage will not only continue uninterrupted, but that coverage will receive more than a passing grade.

A recent report released by the Government Accounting Office revealed that roughly 1.7 million traditional age college students are uninsured in the United States. It's a disturbing statistic, considering that young Americans – while tending to be more healthy – are among the group of Americans also more likely to end up in the emergency room.

And the GAO report showed that in 2005, uninsured students amassed between $120 million and $255 million in uncompensated, non-injury-related medical expenses. Equally disturbing: recent reports revealing that nearly two-thirds of young uninsured adults don't seek treatment because it is too expensive.

They're statistics that colleges are interested in changing and, in recent years, many colleges have begun taking steps, including instituting requirements for proof of health insurance as a condition of enrollment. So, for prospective students, a logical first step is determining whether their college of choice has such an insurance requirement.

From there, it's a matter of considering the options for coverage.

School-sponsored plans

While schools are increasingly asking enrolling students to prove that they're covered, many colleges are also providing a coverage option through student health plans. About 60 percent of all colleges currently offer student health plans, according to the GAO report. Of them, 82 percent of four-year public colleges and 71 percent of four-year private colleges now offer plans.

The good news is that eligibility requirements on student health plans are typically less restrictive than on individual plans. And, if you take advantage of a plan offered by your college, you should be eligible for coverage when you enroll as a full-time student. Additionally, some student health plans will allow you to extend your coverage beyond graduation.

The not-so-good news is that there are huge variations in the costs and the benefits of student health plans, which range from policies that protect you from accidents, to major medical. So it's definitely important to check out a policy's benefits and whether there are gaps in your coverage.

For instance, some student plans may require you to take treatment from your college's student health center or providers within a specified distance from campus. That means you may not have coverage when you travel home. And remember that most student health plans won't cover you if you travel outside the United States, so if you do purchase a student health plan, be certain you secure additional coverage for those trips.

Health care that's a family affair

Despite the increase in the number of student health coverage offered by schools, the GAO's report revealed that most college students between the ages of 18 and 23 receive coverage under another person's plans – and it's usually their parents' policy. By doing so, students avoid an interruption in coverage, a change in benefits and possible restrictions that student health plans may put on care providers.

But again, prospective students need to do their homework:

A recent report by The Commonwealth Fund showed that 60 percent of employer-sponsored health plans required students to be enrolled full-time to receive coverage as a dependent. This means that when a student drops below a specified number of credit hours, they may risk dropping their coverage.

And students should also know that their parents' employer-sponsored coverage will, at some point. Passage of health reform legislation this year ensured that – starting September 23, 2010 – families will be able to keep students on their coverage until the student's 27th birthday. However, students may also be dropped from their parents' coverage if they marry.

Going it alone

If a student has been phased out of their parents' coverage and no school-sponsored plan is available (or a good fit for the student), students may be covered by employer's policy if they work full-time. Or, they can purchase their own standard individual health plan from a licensed health insurance provider.

One obvious difference for students considering a private plan will be a required screening in which the applicant answers a series of questions to determine whether they're eligible for coverage. Applicants with a pre-existing condition may be denied coverage by a particular insurance provider, but should bear in mind that criteria varies from provider to provider – so keep shopping.

Depending on the state in which you reside, you may also be eligible for coverage by a state-sponsored risk pool, a program that provides coverage for individuals denied insurance by private insurers because of their health condition.

As always, no matter what type of insurance you choose, be a responsible consumer. Make sure you understand what you are purchasing and that you closely review the benefits and limitations.