Health insurance for college students and graduates

You’ve got an option to remain on your parents’ health plan until you turn 26, but it’s important to note that the plan’s network might not include hospitals and doctors in the area where you’re going to school, and might not provide maternity coverage for dependents.

It’s also important to understand that the health plan will likely send the explanation of benefits (EOB) to your parents if you receive medical care as a dependent on their plan. If this is a concern for you, a policy obtained in your own name might make you more comfortable.

Read: Should I buy the health plan my college offers? or buy through an ACA exchange?

If you move – and don’t live in the same area as your parents – it might make more sense to shop for your own policy rather than staying on their plan, since the provider network for your parents’ plan may be limited in your area.

Nearly all student health plans offered by colleges and universities are fully compliant with the ACA, with just a few exceptions. ACA-compliant plans cover pre-existing conditions, provide preventive care with no cost-sharing, include coverage for the essential health benefits, and don’t have annual or lifetime benefit caps.

(If a student health plan is self-insured, it doesn’t have to be compliant with the ACA. Some schools with self-insured student health plans have opted not to bring their plans into compliance with the ACA.)

College and graduate students can qualify for subsidized insurance through the ACA Marketplace/exchange even if they’re eligible for student health insurance offered by their college or university – as long as they don’t enroll in the university’s plan. (This differs from the rules that apply to employer-sponsored health coverage offered to employees, which generally makes people ineligible for subsidies in the exchange.)

The ACA requires almost all health plans (with the exception of retiree-only plans) that offer dependent coverage to allow young adults to remain on a parent’s plan until they turn 26.

Points to consider when deciding whether to remain on a parent’s plan.

For grads who want a more robust, ACA-compliant plan that covers the essential health benefits and pre-existing conditions, a plan purchased through the state health insurance exchange is likely to be an ideal solution.

ACA-compliant plans for individuals are available in every state and premium subsidies and cost-sharing reductions are available through the marketplace to make coverage and care more affordable.

Check your eligibility for ACA premium subsidies.

College grads who need temporary coverage until another policy kicks in may consider short-term health insurance, depending on the circumstances. Even grads who have a job lined up may face a waiting period before employer-sponsored health insurance coverage is available.

Note that each state has its own rules and regulations regarding short-term health insurance. And as of September 2024, short-term policies will not be allowed to have total durations of more than four months in any state (some states will continue to impose stricter rules or not allow the sale of short-term plans).

Check availability of short-term plans in your state.

In 40 states, Medicaid has been expanded to cover adults under age 65 with income up to 138% of the federal poverty level.

For a new graduate living in a state where Medicaid has been expanded, Medicaid could be a perfect solution while job hunting. Medicaid enrollment is available year-round, and Medicaid covers pre-existing conditions. In most cases, there are no premiums.

See whether your state has implemented Medicaid expansion.

Getting health insurance through an employer-sponsored plan is a coverage option many college grads envision, and it’s an excellent option if available. Employer-sponsored health insurance generally offers substantial benefits, and employers typically pay a large portion of the premiums.

But while obtaining employer-sponsored health insurance may be the goal, it might not necessarily materialize soon after graduation, or even in the near future. Thanks to the ACA, it’s easier than ever for young adults to have health insurance coverage, even if the benefits they assumed they’d receive from employers take longer than expected to materialize.