If you have a child heading off to college this month, you may vaguely remember an email from the school about student health insurance.
Most elite private universities and many public colleges automatically enroll students in student health insurance plans, which, on average, cost $2,924 a year at public universities and $3,874 a year at private universities for the 2023-24 academic year, according to an industry survey of top universities.
And the thing is, many students don’t need that.
Colleges often require students to have comprehensive health insurance, and student health insurance essentially exists to cover students who arrive on campus without insurance.
Some students benefit greatly from campus health insurance, including international students, those from underinsured families, and students with chronic health or mental health issues.
For many other students, experts say, campus health insurance is duplicative, costly and unnecessary.
“We’re not talking hundreds of dollars. We’re talking thousands of dollars.”
“We’re not talking about hundreds of dollars. We’re talking thousands of dollars,” says Julian Treves, investment adviser and academic expert at Creative Financial Design.
Stanford University charged $7,128 a year for student health insurance for the 2023-24 academic year, according to a study by higher education consultancy Hodgkins, Beckley & Lyon. Northwestern University charged $5,144 a year, Brown University $4,636, University of Pennsylvania $4,210 and Emory University $4,762 — all top-tier private universities.
Among major public universities, the University of Florida came in at $3,093, Ohio State University at $3,592, Berkeley at $3,858 and the University of Iowa at $3,900.
To avoid the four-figure fee, students typically must be persuaded to complete an online waiver and prove they have comprehensive health insurance for their family.
“When our kids went to college, we waived student health insurance every time,” said Steven Bloom, assistant vice president for government relations at the American Council on Education, which represents colleges and universities. “For people who come from families with good health insurance, it doesn’t make much sense.”
Stephen Beckley, a consultant at Hodgkins Beckley, said few colleges actually require students to purchase student health insurance, they simply require that students have adequate insurance.
But about 90 percent of major four-year private colleges and universities and 35 percent of major public universities automatically enroll students in campus health insurance plans, Beckley said, and students have the right to opt out if they don’t want to be covered.
Want to cancel your student health insurance? Don’t hesitate to do so.
And it’s wise to do it soon: Colleges typically ask students to submit waiver applications soon after fall classes begin.
Student health insurance is “probably the single largest discretionary expense that colleges charge,” said Bobby Revell, a personal finance expert at consumer site CardRates.com.
The expense is significant, she said, at a time when tuition and fees at the most expensive private colleges can cost about $70,000.
Treves said his clients spend hours fretting about finding ways to save even a few hundred dollars on college costs. If they already have good insurance for their family, waiving student health insurance is a no-brainer, he said. “It’s an easy way to avoid spending thousands of dollars double-insured on your kids.”
Colleges generally try to be vigilant and inform students and their families that they may have been auto-enrolled in health insurance they don’t need.
“Most universities are proactively pursuing the waiver process, so[families]shouldn’t have to search for it,” Beckley said. “There will be lots of emails.”
However, many families are unaware of the emails and some mistakenly believe they have no choice but to purchase insurance.
Many parents believe that college health insurance is mandatory.
“I think most parents think it’s a requirement,” Revell said. “They get a bill with the word ‘required’ on it.”
Even if parents predict that student health insurance may not be necessary, they are still left with the complicated task of convincing their child to find and fill out a complicated insurance application.
From a behavioral standpoint, auto-enrollment is a powerful force, financial experts say. It’s a matter of simple inertia: If consumers have to jump through hoops to waive the optional fee, they’re less likely to do so.
“Once you sign up for something, you just stick with it,” says Kimberly Palmer, personal finance expert at NerdWallet.
Still, if you have good insurance for yourself or your children, it may be wise to take the time to cancel your student health insurance.
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Beckley said most campus medical centers accept outside insurance, meaning students can get the same medical and dental coverage at school that they get when they’re traveling or staying with relatives far away.
Experts say you should do the math on student health insurance
However, keep in mind that if you choose not to sign up for student health insurance, medical costs at school may be higher than what students would pay at home.
The university is “charging more” for students to visit the health center and increasing fees to cover the increasing costs, Beckley said.
Some health insurance plans don’t work well when you’re out of town. If you have a local health plan in Virginia and you send your child to college in Colorado, the student may have a hard time finding easily accessible care, experts say. If your child goes to college in-state, it may be much easier to find an in-network doctor.
When college students get sick, they often end up going to their local urgent care center, where medical expenses typically cost more out of pocket than care at a regular doctor’s office.
In fact, some urgent care centers near campus market themselves to students as if they are their only medical option, but in most cases, this is not the case.
“Sometimes they’re set up to really exploit students,” Beckley said.
Illustrated Explanation: How has the cost of college increased recently, and how much have tuition fees risen?
When is student health insurance worth it?
People with chronic health or mental health issues may end up paying less for student health insurance. For example, many universities convince local psychotherapists to sign up for student health insurance even if they won’t insure other patients.
“There are a lot of situations where this will save money and make for a better insurance program,” Beckley said.
So if you’re planning on sending your child to college, do a bit of research into tuition and fee breakdowns. Google the name of the college and the phrase “student health insurance” to find and read the school’s rules. And take a fresh look at your insurance policies.
If you choose to forgo student health insurance, experts say you should take the time to explore the options available for your child to get health care on or off campus.
“This is a natural step,” Treves said. “Trust me, the last thing an incoming freshman is thinking is, ‘Where’s the nearest emergency room?'”
