Student medical insurance tips

by Tony Novak, CPA, MBA, MT
, revised 11/30/2011

Each year millions of American families with graduating high school and college students find that they must replace their student’s health insurance because they are no longer covered by their family or school-sponsored plans. Tony Novak, MBA, MT, enrollment adviser for FreedomBenefits.net, offers these tips to help find the best plan.

1) Shop early - Rates for student medical plans usually increase on June or December of each year and then remain level for the upcoming school year. Those who enroll in advance save money by locking in lower rates for the year ahead.

2) Understand key distinctions - Commercial student medical insurance plans are usually more expensive and carry a higher deductible than those offered through a college health service facility, but the commercial insurance plans offer coverage with any doctor or hospital anywhere in the U.S. rather than restrict coverage to a few participating providers in the college town. These commercial medical insurance plans are "indemnity" type. This means that they cover the "ordinary and necessary expenses" (as determined by your doctor and AMA standards) with any doctor, hospital or provider of your choice. There is no required pre-authorization or required network. A typical plan costs $500 to $600 per year. School-based health plans tend to cost a bit less, but limit coverage to certain treatments and local medical providers.

3) Value for graduate students - Student medical insurance plans are a great deal for graduate students and older "non-traditional" students because the premium rates are based on the very low average medical expenses of the more typical 18-21 year old student group. This is a benefit to older graduate students.

4) Consider short tem coverage as an alternative - Short term medical insurance is often a better choice than student insurance if the coverage may be required for less than six months. Short term medical insurance is similar to student insurance, but offers slightly better benefits.

5) Pre-existing medical conditions - Student medical plans typically cover pre-existing medical conditions after the policy has been in force for 12 months. This is more liberally than most other commercial medical insurance plans. See Freedom Benefits for major medical insurance options and Core Health Insurance for more information on some of the most popular limited benefit alternatives.

6) Exclusions - Student medical plans do not cover maternity costs, weight control treatments, mental, dental, vision, over-the-counter drugs and pharmacy prescriptions, or injuries sustained from participating in college sports.

7) After Graduation - Students can keep their private commercial student medical insurance in force after graduation for as long as they wish, up to age 60. The plan automatically renews as long as you pay the premium and this is a much less expensive option than is typically available to the general public.

Opinions expressed are the solely those of the author and do not represent the position of any other person, company or entity mentioned in the article. Information is from sources believed to be reliable but cannot be guaranteed. Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues or a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. Tony Novak operates as an independent adviser under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator" but is not a representative, agent, broker, producer or navigator for any securities broker dealer firm, federal or state health insurance marketplace or qualified health plan carrier. He has no financial position in any stocks mentioned. Novak does work as an accountant, agent, adviser, writer, consultant, marketer, reviewer, endorser, producer, lead generator or referrer to other companies including the companies listed in the articles on this web site.

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