Medicaid vs. Student Health Insurance: Which is Better for College Students

Comparing Medicaid and Student Health Insurance Plans (SHIPs)

This article featires a comprehensive overview of colleges’ top two healthcare insurance options: Medicaid vs. Student Health Insurance.

Without proper health insurance, students may face hefty medical bills or delay needed care. This could interfere with their studies and overall well-being. A 2023 Federal Reserve report found that 23% of adults faced unexpected medical expenses, and 28% skipped treatment due to cost, risking more severe health issues.

Many students rely on their parent’s insurance, but it might not fully cover their needs, and not everyone has this option. Among the most discussed topics in healthcare insurance for college students is Medicaid vs. Student Health Insurance. These insurances are known for their affordability.

While both serve great benefits, one can outweigh the other, depending on several factors. This includes:

• where your college is located in
• your financial situation
• whether you qualify for Medicaid or SHIP
• your specific healthcare needs

Let’s take a deeper look into Medicaid vs. Student Health Insurance.

Related Articles:

• Can College Students Qualify for Medicaid? Eligibility Explained
• What is a Student Health Insurance Plan (SHIP) and How Does it Work
• Step-by-Step Guide to Applying for Medicaid as a College Student
• Marketplace Health Insurance vs. Student Health Plans: Which is Right for You?
• How to Compare SHIPs to Private Health Insurance Plans

What is Medicaid and Who Qualifies?

Medicaid is a government program that helps low-income people, including college students, get health coverage. Both the federal government and states fund the program. Each state runs its own version of Medicaid so the program can vary from one state to another.

Benefits also vary from state to state. However, according to medicaid.gov, mandatory benefits include:

• inpatient and outpatient hospital services
• physician services
• laboratory and x-ray services
• home health services

Optional benefits of Medicaid for college students include:

• prescription drugs
• case management
• physical therapy
• occupational therapy

Here are a few factors affecting Medicaid eligibility for students:

1. Income: Most students may qualify if their household income is below a certain threshold, which varies by state. Students living independently or in low-income households often meet these criteria.
2. Age: Children under 18 generally qualify for Medicaid if their parents meet the income requirements. For adults, eligibility is typically tied to being under a certain income level and may vary by state.
3. Full-Time Student Status: While being a full-time student may impact eligibility for other programs, Medicaid eligibility is more likely to depend on financial status than enrollment in school. However, some states may have additional restrictions or allowances for students who do not work full-time or have limited income.
4. Other Factors: In some states, pregnant students or children may also qualify for Medicaid, even if they are not otherwise low-income.

Rules and eligibility also vary by state. States set their own income limits, and some expanded Medicaid to cover more people under the Affordable Care Act. Some didn’t, so people in those states might not qualify even if their income is low.

The application process and enrollment procedures can also vary. Some states have streamlined online applications, while others may require more paperwork or in-person interviews.

What are Student Health Insurance Plans (SHIPs)?

Another form of affordable student health insurance is the SHIP. SHIPs are programs offered by many colleges and universities that sometimes partner with private insurance companies. Benefits and coverage vary but typically include on-campus health services like:

• Medical services
• Vaccinations
• On-campus health services
• Mental health support
• Preventive care
• Health education and resources

Additional benefits (often optional) include:

• Specialist referrals
• Accident and injury coverage
• International health coverage
• Dental and vision care

Eligibility for SHIPs is usually tied to your enrollment status, meaning you must be a full-time student at a participating university. However, some exceptions or specific criteria may vary from school to school. Many schools automatically enroll students in the SHIP, while others may give students the option to opt in or out, especially if they already have their own health insurance.

If you’re already covered by your parent’s insurance or another private plan, you can opt out of the SHIP. However, the university will likely ask for proof of your current coverage. To waive the SHIP, you’ll need to:

• Provide documentation showing that your insurance meets the university’s coverage requirements.
• Ensure your insurance is valid for the entire academic year (not just a short-term plan).
• Complete the waiver process by the deadline set by the university.

Make sure to check with your school’s health services for specific details and deadlines.

Comparing Coverage: Medicaid vs. SHIPs

Here’s a more extensive side-by-side comparison of Medicaid vs. Student Health Insurance:

Service/Benefit	Medicaid for College Students	Student Health Insurance Plans (SHIPs)
Eligibility	– Available to students who meet state-specific income and residency requirements. – Medicaid eligibility depends on income level and state of residence.	– Typically offered to full-time students enrolled at a college or university. – Eligibility requirements depend on the specific institution’s plan.
Routine Check-ups	– Covered with no or minimal co-payment, depending on state. – Typically includes annual physical exams, preventive screenings, and vaccinations.	– Typically covered under SHIPs, which may provide free or low-cost annual check-ups and preventive care. – Coverage varies by plan, but check-ups are often included.
Specialist Visits	Covered with referral from a primary care physician (PCP), depending on the state’s Medicaid program.	– SHIPs may cover specialist visits, but students may need a referral from an on-campus or network provider. – The extent of coverage depends on the plan.
Mental Health Services	– Medicaid covers outpatient therapy, inpatient care, and substance abuse treatment. – Availability varies by state.	SHIPs generally include mental health services, such as counseling and therapy, but coverage and benefits can differ depending on the plan.
Prescription Drug Coverage	– Covered under Medicaid, with low or no co-payment for most medications. – Coverage varies by state and formulary.	– SHIPs typically cover prescription drugs, with some plans offering prescription benefits with a co-payment. – Coverage for medications may vary depending on the plan’s formulary.
Out-of-State Coverage	Medicaid is state-specific, so students attending school out of state may have limited or no coverage except for emergencies.	– SHIPs may offer national or regional coverage, depending on the insurer. – Students may have coverage while studying out of state, but it depends on the specific plan.
Emergency Care	– Covered, even when out of state, but only for emergencies. – Students should check with their state Medicaid office for specific details.	SHIPs generally cover emergency services, and the extent of coverage for emergencies out of state depends on the plan’s network and policy terms.
Preventive Care	Medicaid generally covers preventive care, including vaccinations, screenings, and wellness checks, with minimal copays.	SHIPs typically include preventive care services, such as vaccinations and screenings, without additional costs or with low copays.

Cost Comparison: Which is More Affordable?

In addition to benefits, you also need to know the costs of different student health insurance coverage options. While both options are generally considered affordable, the actual costs can vary.

Medicaid is typically the most affordable option for students who qualify. If you’re eligible, you might pay no premiums or only a small fee. It’s usually less than $50 per month, depending on your state and income. Copays are also very low, generally ranging from $0 to $10 for routine visits, and preventive care often costs nothing.

In contrast, university health insurance (SHIP) plans are often more expensive. Depending on your school, premiums can range from $500 to $2,000 per semester, with the average being closer to $1,000 per semester. Copays typically range from $10 to $40 per visit, and the deductibles might be anywhere from $250 to $1,000 annually.

For students receiving financial aid, it’s worth checking if your school allows you to use that aid toward SHIP premiums. If you have $5,000 in financial aid, for instance, you may be able to use that to cover SHIP costs. Medicaid, however, doesn’t typically consider financial aid since eligibility is based on your income, not your school’s assistance.

When it comes to cost comparison between Medicaid vs. Student Health Insurance, the former often wins. Medicaid generally has lower premiums and copays.

Accessibility and Convenience: Which Fits College Life Better?

For students, especially those attending school out-of-state, the ease of enrollment and network limitations are crucial in choosing college healthcare options.

Medicaid is state-specific, so you might face limitations if you’re studying out-of-state. Coverage may only apply in emergencies, and you’ll need to reapply if you move to a new state. The enrollment process can also vary, which may create delays or extra steps to get coverage.

SHIPs, on the other hand, are designed for college students and offer more convenience. Most schools automatically enroll students, and coverage is easy to access through campus health centers or nearby providers. SHIPs often include national or regional networks, so even if you’re studying far from home, you can still get care. Plus, SHIPs typically cover a wide range of services, including preventive care, mental health support, and specialist visits—all without the hassle of finding external providers.

In short, while Medicaid can be a great option for low-income students, SHIPs are often more convenient and accessible, especially for out-of-state students, thanks to easy enrollment and campus-based care.

Pros and Cons: Medicaid vs. SHIPs

Pros and Cons of Medicaid for Students

Pros:

• Low Cost: Often very cheap, with minimal copays.
• Comprehensive Coverage: Covers doctor visits, hospital care, prescriptions, and mental health.
• No Deductibles: Most plans have no deductibles, just low copays.
• Eligibility for Pregnant Students: Pregnant students may qualify, even if they are not low-income.

Cons:

• Limited Out-of-State Coverage: Medicaid only works in the state where you’re enrolled and only for emergencies out of state.
• Complex Enrollment: Application processes can be long or require paperwork.
• State Variability: Medicaid benefits and eligibility rules vary by state, so that coverage might be different everywhere.

Pros and Cons of SHIP for Students

Pros:

• Convenient: Often automatically enrolled, with easy access to campus health services.
• Comprehensive Coverage: Includes routine care, mental health, prescriptions, and sometimes dental/vision.
• Out-of-State Flexibility: Many SHIPs have nationwide or regional coverage.
• International Coverage: Some plans cover health needs abroad, which is ideal for international students.

Cons:

• Higher Costs: Premiums can range from $500 to $2,000 per semester.
• Referrals for Specialists: You may need a referral for specialist visits, limiting direct access.
• Limited Coverage for Some Services: Some SHIPs don’t cover certain treatments or may require copays.

The right insurance options will depend on your personal needs. Here are a few scenarios:

1. If you’re an in-state student with a limited income, we suggest choosing Medicaid. It offers affordable coverage, with minimal to no premiums and low copays. Plus, it provides comprehensive benefits like doctor visits, prescriptions, and mental health services.
2. SHIP might be the better choice for students attending college away from home. These programs typically offer nationwide or regional coverage, ensuring you can access copay services no matter where your school is located.
3. SHIP is also a great option for international students studying in the U.S. Many SHIPs provide coverage for healthcare needs abroad and offer easy access to on-campus medical care, making it a great choice for students who may travel or need support while studying internationally.

Making the Right Choice for Your Health and Budget

Navigating the world of college health insurance for the first time can be overwhelming. However, taking the time to research and understand your options is key to finding affordable coverage.

The best way to ensure you choose the right option is to consider your health needs, budget, and location. For cheaper coverage, Medicaid is often the most affordable. However, if you want convenience and easy access to campus-based healthcare, SHIPs can be great.

We highly suggest asking your school’s health office about SHIPs and Medicaid options. They can provide a more extensive Medicaid and university health insurance plan comparison to help you decide. You should also visit your state’s Medicaid site to check eligibility and apply.