Monday, October 20, 2014
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Billing Statement Reminder: Paying for Health Insurance at College



Opening college billing statements is like a Pandora's box of fees and charges. Most of them are unavoidable, but one fee that may be unnecessary is health insurance for students.

That's because roughly two-thirds of college students remain eligible for health insurance under their parents' plan, making a school-based policy redundant.

With anywhere from $600 to $1,800 in savings on the line, most families can't afford to pay for something they do not need. Let's take a look at some important points about college health insurance to help make a sensible choice.

Schools automatically will bill students for health insurance when they first enter the school for protection purposes. In an environment like college, with thousands of young people descending on a campus all at once, the potential for sudden outbreaks of communicable diseases is worrisome. As a result, colleges must take steps to have health care readily available to all their students. It's a public health issue that colleges take very seriously. Since it is better to be safe than sorry, everyone gets billed for health insurance to secure access to treatment.

Schools allow for students and families to individually cancel their coverage only after proving coverage under a family's pre-existing policy. In order to cancel, a waiver is normally required to be signed along with a submission of copies of the current family health insurance documentation. Once verified, the excess charges are lifted from the account. There is a window of time when this cancellation must occur, or the charges stick, so do not waste any time. Get this done in the beginning of the semester.

Let's take a look at some considerations when deciding on a college health-care plan:

  • When does it make sense to keep the college policy? If the student attends a school far from home, his or her family policy may not extend to the new geographic region. If the school's doctor refers you to a local specialist, you could end up paying a huge deductible for service.

  • What is the maximum benefit? Many school-based policies provide a maximum of $30,000 in benefits for each condition. This is very low for the cost of treating very serious conditions.

  • Do they cover pre-existing conditions? Not all college health-care plans will cover pre-existing conditions, so you need to read the fine print.

Check for restrictions for specific treatments: If it is a long list of things they will NOT pay for, it's not a good sign.

Generally, students who are covered with their parents' plan would do well to cancel their college health insurance and save some extra money on what already is a very expensive educational experience, but as always, consider your personal circumstances carefully before committing one way or the other. Insurance is a product easily forgotten about until an emergency arises, then it suddenly becomes extremely important.

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Ken O'Connor is a financial aid expert and the director of student advocacy at cuStudentLoans.org. Learn more about credit union private student loans and college planning by visiting his blog.



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