Student Insurance: Obamacare Or Not?

The Affordable Care Act, also known as Obamacare, has improved health coverage options for students. Before the ACA, health coverage for college students was inconsistent. Now, young adults can remain on their parents' health plans until the age of 26, regardless of their student or marital status, or whether they are claimed as dependents.

International students are considered non-residents and are therefore not required to comply with Obamacare. However, some universities require students to have health insurance, and many offer their own plans.

International students are exempt from Obamacare

International students are considered non-residents in the US and are therefore exempt from Obamacare. This exemption applies to international students holding an F, J, Q, or M visa for their first five years in the US. After this, they must undergo a categorization process depending on their status and the number of years they live in the US and outside the US.

International students on J Visas, such as teachers, au pairs, trainees, work and travel visa holders, and high school students, are not required to purchase ACA-compliant health insurance for up to two years.

ACA-compliant plans are designed for permanent citizens in the US and are therefore not ideal for international students. These plans are also costly and offer benefits that international students rarely need. International student insurance plans are more affordable and include benefits such as emergency medical evacuation, emergency reunion coverage, and repatriation.

While Obamacare is not mandatory for international students, many universities require health insurance that is PPACA-compliant.

Student health plans count as Minimum Essential Coverage

A university health plan counts as Minimum Essential Coverage for Obamacare if it is fully insured or self-insured. This means that students can be protected from the fee for not having health coverage. However, it is important to note that not all plans marketed towards students are considered "student health plans" under the law. For example, a short-term policy advertised as "perfect for students" would not have to be compliant with the Affordable Care Act (ACA).

If a school self-insures its student health plan, it is not subject to regulation by the Department of Health and Human Services (HHS). In 2012, HHS confirmed that around 200,000 students were covered under self-insured health plans offered by roughly 30 colleges and universities. While schools with self-insured health plans can request approval from HHS for their health plans to be considered minimum essential coverage, they are not required to do so. For example, BYU's student health plan is not considered minimum essential coverage under the ACA.

When choosing a health plan, students should carefully consider their options, including their parents' plans, Medicaid, the Marketplace, catastrophic plans, and student health plans.

Students under 26 can stay on their parents' plan

The Affordable Care Act (Obamacare) has improved health coverage options for students. One of the first regulations to be implemented in 2010 allows students under 26 to stay on their parents' health insurance plan. This applies regardless of whether they are enrolled in school, are counted as their parents' tax dependent, are offered coverage from their own employer, or are married.

This provision is especially beneficial for students with pre-existing conditions, as individual insurance was previously medically underwritten, creating a significant hurdle for students with health issues. Now, students can remain on their parents' plan, which cannot deny coverage based on pre-existing conditions or gender, until they turn 26.

However, there are some considerations to keep in mind. Firstly, if the parents' plan is limited to a specific state, and the student attends college out of state, they might find themselves without non-emergency health care options outside of their parents' state. Secondly, maternity care for dependents is not required for large group plans, so students expecting a child might want to consider switching to their own plan, which guarantees maternity benefits. Lastly, if the parents' premium is based on the number of dependents, it might be more cost-effective for the student to get their own coverage, especially if they qualify for a subsidy or premium-free coverage via Medicaid.

Students may qualify for Medicaid

Medicaid is typically reserved for low-income earners who cannot afford to purchase health insurance on their own. As many college students either don't work or only work part-time, they may not be earning a lot of money and could therefore qualify for Medicaid. However, if someone can claim a student as a dependent, they are unlikely to be eligible.

To be eligible for Medicaid, individuals must meet certain non-financial criteria. They must be either citizens of the United States or certain qualified non-citizens, and they must be residents of the state in which they are receiving Medicaid.

Medicaid eligibility is based on Modified Adjusted Gross Income (MAGI). Anyone making between 100% and 400% of the Federal Poverty Level in MAGI qualifies for cost assistance on their state's Marketplace. In states that have expanded Medicaid, students with incomes below 138% of the Federal Poverty Level qualify for Medicaid. As of 2024, this equates to an annual income of $20,782 for a single individual in the continental US.

Students can apply for Medicaid through the Health Insurance Marketplace website or at their state's Medicaid agency office. If a student is already covered under their parent's health insurance plan, they can remain on this plan until they are 26 years old.

Students can purchase health insurance through the Obamacare exchanges

Eligibility and Enrollment

Students can enroll in health insurance plans through the Health Insurance Marketplace, also known as the Obamacare exchanges. This option is available to students who are US citizens or legal residents. It is important to note that international students on specific visas, such as F1 or J1, are generally exempt from the ACA requirements and are not eligible for Obamacare plans. However, they may need to meet other health insurance requirements set by their educational institution.

Cost Assistance and Medicaid

Most students who file taxes separately from their parents and have lower incomes may qualify for cost assistance on the Marketplace or Medicaid. Cost assistance is determined by household income, and those with incomes between 100% and 400% of the Federal Poverty Level can receive help. In states that have expanded Medicaid, students with incomes below 138% of the Federal Poverty Level may be eligible for Medicaid, which offers free or low-cost coverage.

Parent's Health Plan

The ACA allows students under the age of 26 to remain on their parent's health insurance plan, regardless of their student status, marital status, or employment. This option provides continuous coverage without the need to switch plans. However, if the student attends college in a different state, network restrictions may limit their access to healthcare providers. In such cases, enrolling in a separate plan in the state of their college may be more practical.

Student Health Plans

Many universities offer student health insurance plans, which can be an easy and affordable option for basic insurance coverage. These plans are now regulated by the ACA, ensuring that they cover essential health benefits without annual or lifetime benefit maximums. However, it is important to carefully review the specifics of these plans, as some may not provide certain benefits like contraceptive services.

Catastrophic Coverage

Students under the age of 30 have the option to purchase catastrophic health insurance plans. These plans typically have lower monthly premiums but come with high deductibles, meaning students pay for most of their care until reaching a certain amount. Catastrophic plans can be a cost-effective way to protect against worst-case scenarios but may not offer comprehensive coverage.

In conclusion, students have several health insurance options available to them through the Obamacare exchanges and other avenues. It is important for students to carefully consider their individual needs, income, and family situation when choosing a health insurance plan that best suits their circumstances.

Frequently asked questions