Staying on Your Parent’s Plan Until 26: The Pros and the MAJOR Con (Out-of-State Networks).
My “Great” Insurance Was Useless at My New College.
I was thrilled to stay on my parents’ fantastic PPO plan when I went to college. It was a huge pro; the coverage was amazing. But there was a major con I didn’t see coming. My college was in another state, 500 miles from home. When I got sick, I discovered that almost all the local doctors and the student health center were “out-of-network.” My great insurance was practically useless. I was faced with paying huge out-of-network bills for any non-emergency care. It was a geographic nightmare.
How a Student Health Plan Can Be Cheaper and Offer Better Local Coverage at College.
Designed for the Campus, Not for Your Hometown.
After my out-of-network nightmare, I looked into my university’s student health insurance plan. I was shocked. The premium was significantly cheaper than what my parents were paying to keep me on their plan. More importantly, the student plan’s network was built around the campus. It included the student health center, the local hospital, and all the doctors in the college town as in-network providers. It was a cheaper plan that offered me far better, more accessible local coverage.
The “Out-of-Network Nightmare” for a Student Attending College 1,000 Miles From Home.
A Health Plan That’s on the Wrong Side of the Country.
If your parents’ health plan is an HMO or an EPO based in California, and you are going to college in New York, that plan is almost completely worthless to you. HMOs and EPOs have zero out-of-network coverage for anything other than a life-threatening emergency. You will have no coverage for a routine doctor visit, a specialist consultation, or even a trip to a local urgent care center. You are effectively uninsured for 99% of your healthcare needs in your new college town.
A Cost-Benefit Analysis: The High Premium of a Parent’s PPO vs. a Low-Cost Student Plan.
Do the Math. The Answer Might Surprise You.
My parents’ employer charged an extra $400 a month to keep me on their family PPO plan. That’s $4,800 a year. The student health plan at my university, which was a good-quality Gold-level plan, cost $3,000 for the entire academic year. By waiving the parent’s coverage and enrolling in the student plan, our family saved $1,800, and I got a plan that was actually designed to be used where I was living. The math was a no-brainer.
When is the Student Health Plan a “Waiver-able” Rip-off?
Check the Quality Before You Enroll.
While many student health plans are excellent, some are not. Some universities offer very cheap, “bare-bones” plans with high deductibles and very limited benefits. They are often “waiver-able,” meaning you can opt out if you can prove you have other coverage. In this case, if your parents have a high-quality PPO plan with a good national network, sticking with their plan, even if it’s more expensive, might be the better choice for your actual health, despite the network challenges. You have to compare the quality, not just the cost.
How to Check if Your Parent’s Plan Has a Good National Network BEFORE You Go to School.
The 15-Minute Task That Prevents a 4-Year Headache.
Before you decide to stay on your parents’ plan, you must do this research. Go to the insurance company’s website. Use the “Find a Doctor” tool. Enter the zip code of your new college town. Search for primary care doctors, specialists, and the local hospital. If the search results come back with a robust list of in-network providers, then staying on your parents’ PPO is a great option. If the results are a barren wasteland, you know you need to enroll in the student health plan.
The Student Health Plan is Designed for the Campus and the Town. Your Parent’s Plan is Not.
A Custom-Built Solution vs. a Shoehorned Fit.
A university’s student health insurance plan is custom-built for its students. The network is centered on the campus health services and the surrounding medical community. The benefits are designed to meet the needs of a young adult population. Your parents’ plan is designed for their employees in your hometown. Trying to make that plan work in a different state is like trying to fit a square peg in a round hole. The student health plan is the round peg for the round hole.
A Tale of Two Students with a Broken Leg: One on a Parent’s Plan, One on the Student Plan.
One Had a Simple Copay. The Other Got a $5,000 Surprise Bill.
Two students broke their legs playing soccer. The first student was on her parents’ out-of-state HMO. The ER visit was covered, but the follow-up visit with the orthopedic specialist was considered out-of-network, and she got a bill for $5,000. The second student was on the university’s student health plan. The local orthopedic specialist was in-network, and her total cost was a simple $100 copay. Same injury, same town, but a world of difference in the financial outcome.
Don’t Just Automatically Waive the Student Health Plan. Do the Math First.
The Default Choice is Often the Wrong One.
Most universities require you to actively “waive” their student health plan if you want to stay on your parents’ plan. The default is to enroll you. Don’t just sign that waiver on autopilot. See it as a prompt to do a serious cost-benefit analysis. Compare the annual cost of staying on your parents’ plan versus the cost of the student plan. Investigate the networks in your college town. Making an informed, conscious decision can save you a fortune and ensure you have access to the care you need.
The Critical Choice That Determines Your Access to Healthcare for the Next Four Years.
This is Not a Small Decision.
The choice between your parent’s plan and the student health plan is one of the most important financial and logistical decisions you will make as you head off to college. It will determine which doctors you can see, how much you will pay, and how easy or difficult it will be to get care when you are sick and away from home. Do not take this decision lightly. A little bit of research and a clear-eyed comparison of the real-world trade-offs will set you up for four years of healthcare peace of mind.