University Insurance Plans: How Many Students Are Covered?

Health insurance is a necessity for college students in the United States, and there are several options available to them. While most students rely on their parents' health insurance, it may not be the best option for coverage. Many universities offer student health insurance plans, which are said to cover around 3 million students. These plans vary in cost, benefits, coverage areas, and how they work, with annual costs ranging from $2,000 to $5,000. Students can also purchase their own insurance plan, get coverage through a part-time job, or utilise government programs such as Medicare, Medicaid, Veterans Affairs, or CHIP. Understanding the different options and choosing the right plan is crucial for students to ensure accessible and affordable healthcare during their college years.

Student health insurance plans (SHIPs)

According to a 2023 report, around 2% of students don't have health insurance. While health insurance is not mandatory for all college students, it is required in some states and by some colleges and universities. For example, the University of North Carolina and the University of California systems mandate health insurance for their students.

There are several ways students can get health insurance coverage: through a student health insurance plan (SHIP), by staying on a parent's insurance plan, buying an individual plan, getting coverage through a part-time job, or enrolling in a government program.

SHIPs are offered by 91% of public universities and 77% of private institutions. The average annual cost of a public university student health insurance plan is $2,924, while a private school health plan averaged $3,874 annually for undergraduates in the 2023-24 plan year. These plans are designed to meet the needs of local students, as well as those who may travel for internships, study abroad, or spring break. They often use existing health insurance company networks, such as Cigna or Blue Cross Blue Shield, and offer extra benefits like virtual or app-based mental health sessions.

Financial aid awards can include SHIP premiums to reduce monthly costs, and coverage is available for spouses and children for an extra premium. International coverage typically includes emergency medical evacuation, repatriation of remains, and accidental death and dismemberment.

Other Options

Students can stay on their parent's insurance plan until the age of 26, and most do. However, if a student is moving to a different state or region, they need to understand the plan rules and their coverage. Many parent plans offer a narrow network of providers limited to a local area.

A small percentage of students (around 2.5%) buy their own health insurance plan, likely through the Marketplace in the state where they attend college. If a student is over 26 or their parents don't have health insurance, they will likely need to enroll in a Marketplace plan. Students under 30 can qualify for a low-premium catastrophic plan, which offers three free doctor visits a year and free preventive care, but usually has a high deductible.

Around 9% of students get health insurance through an employer's group health insurance plan, either their own or their spouse's/partner's. However, employers are not required to offer coverage to part-time workers.

Finally, almost 10% of students get health insurance from a government or public health source, such as Medicare, Medicaid, Veterans Affairs, or CHIP.

Choosing a Plan

When choosing a health insurance plan, students should consider the following:

• Medication: Can you get prescriptions by mail order, or is there a local pharmacy you can access?
• Primary care: Can you find an in-network primary care physician near where you'll attend school, and is that physician accessible without a car?
• In-network care: Are there in-network options for specialist providers, urgent care centers, and hospitals near your school?
• On-campus coverage: Does your health plan cover the on-campus health center and mental health services?
• Portability: Does the plan cover you when you travel, work, or study abroad, and when you return home?

Self-bought health insurance plans

Around 2.5% of students in the US rely on self-bought health insurance plans. These are likely to be Marketplace health insurance plans, based in the state where the student attends college. If you are over 26 or your parents don't have health insurance, you will likely need to enrol in a Marketplace plan.

If you are under 30, you can qualify for a low-premium catastrophic plan, which offers free preventative care and three doctor visits a year. These plans usually have a high deductible. If you return home to another state during the summer, your Marketplace coverage may be limited to emergencies only.

When you move to attend school, you may be eligible for a Marketplace special enrolment period, which allows you to enrol immediately instead of waiting for the annual open enrolment period.

Marketplace coverage will depend on your income, family size, and location. If you are a dependent on your parent's taxes, you will need to include their income in your application.

If you are self-employed, you can apply for a short-term health insurance plan, which can provide coverage for up to four months while you consider longer-term options. The Affordable Care Act now allows a self-employed health insurance deduction on premiums of 100%, meaning you can reduce your adjusted gross income by the amount of health insurance premiums you pay in a calendar year.

Parent's insurance plan

University students have a variety of options when it comes to health insurance plans. While most universities provide student health insurance plans, students can also be covered by their parents' insurance plans.

Parents' Insurance Plan

Parents' insurance plans are a popular option for university students. In fact, according to the American College Health Association (ACHA), the primary source of health insurance for 54% of students is a parent's or guardian's plan.

One of the benefits of the Affordable Care Act (ACA) is that young adults can remain on their parents' health insurance plans until the age of 26. This applies regardless of their student status, dependency on their parents' taxes, or whether they are married.

However, it is important to note that if the student is studying in a different state or region, the coverage provided by their parents' plan may be limited. Many parents' plans tend to offer a narrow network of providers in the local area, even if the plan is not designated as an HMO (Health Maintenance Organization). Therefore, students attending school in a different state or region may only have coverage for emergency care.

Before enrolling in a parents' plan, it is essential to review the plan's coverage documents and understand the provider network to ensure adequate coverage while studying away from home.

Other Options

In addition to parents' insurance plans, university students have several other options for health insurance:

• Student Health Insurance Plans (SHIPs): These are offered by colleges or universities and can be an easy and affordable way to get basic insurance coverage. However, it is important to note that not all colleges require health insurance, and the specifics of these plans vary by institution.
• Individual Health Insurance Plans: Students can purchase their own health insurance plans, especially if they are over 26 or their parents do not have insurance. These plans are typically based in the state where the student attends college.
• Employer-Sponsored Health Insurance: Approximately 9% of students obtain health insurance through their own or their spouse's/partner's employer.
• Government Health Insurance Programs: About 10% of students receive health insurance from government sources such as Medicare, Medicaid, Veterans Affairs, or CHIP.

Choosing a Plan

When choosing a health insurance plan, students should consider various factors, including medication needs, access to primary care physicians, in-network care options, on-campus coverage, and portability of the plan.

While student health insurance plans offered by universities can be convenient, they may not always be the most affordable or comprehensive option. Parents' insurance plans can provide an alternative, especially if the student is still a dependent and the family has a group health insurance plan. However, it is crucial to review the specifics of the plan to ensure adequate coverage, especially when studying away from home.

Employer's group health insurance plan

University health insurance plans are a primary source of health insurance for millions of students in the US. While most students are covered by their parents' insurance plans, around 9% of students rely on an employer's group health insurance plan.

An employer's group health insurance plan is a type of health insurance offered by an employer to its workers as a benefit. It is generally a more affordable option than buying individual coverage directly from an insurer. Group health insurance plans are purchased by companies and then offered to their employees. These plans are only available to groups, meaning individuals cannot purchase coverage through them.

Employers contract with health insurance companies to offer health plans, and employees choose their plan during open enrollment, when they first become eligible, or during a special enrollment period if they qualify. Employees pay a health insurance premium to the health insurance company, and the employer pays its share of the premium. These plans usually have provider networks, and staying within this network saves employees money.

The cost of group health insurance is usually much lower than individual plans because the risk is spread across a higher number of people. The more people who buy into the plan, the cheaper it becomes. In 2023, the average group health insurance policy cost $8,435 annually for an individual, with the employee paying 17% of the premium. For family coverage, the average cost was $23,968, with the employee paying 29% of the premium.

The main benefit of group health insurance for employees is that businesses generally pay most of the health insurance premiums. However, there are other positives for both employees and employers. Group health insurance has cheaper premiums than unsubsidized ACA plans. Employer benefits packages may also include dental, vision, life, disability, and critical illness insurance, typically at a low cost or free.

Who is eligible?

To be eligible for group health insurance, an employee must be on payroll, and the employer must pay payroll taxes. Independent contractors, retirees, and seasonal or temporary employees are usually not eligible for group coverage. Employees on unpaid leave are often ineligible until they return to work.

Government health insurance plans

For students in the US, there are several options for government health insurance plans. Firstly, students under the age of 26 can remain on their parents' health insurance plans, regardless of their student status, marital status, or location. This is thanks to the Affordable Care Act (ACA), which has improved insurance coverage options for students.

Secondly, students can apply for their own government-backed health insurance plans. The ACA has also made it possible for students to access individual insurance, regardless of their medical history, and created subsidies to make premiums more affordable for low- and middle-income earners.

Thirdly, students may be eligible for Medicaid, which is available for adults with incomes up to 138% of the poverty level. This varies by state, but in 2024, it was $20,782 in annual income for a single individual. Additionally, some states, like California, allow students to qualify for Medicaid even if they are only living in the state temporarily to attend school.

Finally, other government health insurance plans include Medicare for those over 65 or with specific physical disabilities, Veterans Affairs health coverage for retired military members, and the Children's Health Insurance Program (CHIP) for those under 19.

While the majority of universities provide student health insurance plans, these vary by institution and are not always considered "student health plans" under the law. As such, government health insurance plans can provide an important safety net for students who may not have access to other forms of health coverage.

Frequently asked questions