For students from India, going abroad to the USA to study is the most exciting chapter of their lives. It opens up new opportunities and a chance to work in the world’s best companies.
However, before you go, you must know about how the US healthcare and medical insurance system works. Unlike most European countries, Australia, Canada, and the United Kingdom, the USA has no universal health care. Hospitals in the United States are considered very expensive compared to other developed countries.
Even minor ailments that cost a few thousand rupees to treat in India can turn out to be a major expense. For example, an operation to fix a broken finger can routinely cost $7,000 (INR 6.28 lakhs) in the USA.
You need to purchase a medical insurance plan that is compatible with the Affordable Care Act before you go abroad. In this article, we explain what the Affordable Care Act is and how it impacts your health care plan purchase.
What is the Affordable Care Act (ACA)?
The Affordable Care Act (ACA) is often called “Obamacare”. It is a legislation enacted in 2010 and signed into law by President Barack Obama.
It aims to make health insurance more accessible and affordable for Americans by expanding Medicaid eligibility. It also focuses on creating health insurance marketplaces where individuals can compare plans and buy the one best suited for their needs.
ACA prohibits insurance companies from denying coverage based on pre-existing conditions. As a part of the legislation, the government provides subsidies to help people afford coverage based on their income level.
Why was the ACA necessary?
Before the ACA, the healthcare system in the USA faced significant challenges such as:
High Uninsured Rate
Millions of Americans lacked health insurance. This caused constant worry and anxiety about financial insecurity. Most patients ignored medical care since they could not afford it.
Pre-existing Condition
Health insurance in the USA is very expensive. Moreover, insurance companies could deny coverage to individuals with pre-existing health conditions. This left a large segment of the population vulnerable to diseases and unable to seek medical help.
Lack of Consumer Protection
The insurance companies focussed more on the bottom line rather than on helping the customer. Insurance claims were rejected for the flimsiest of reasons. There were limitations on coverage, unexpected cancellations, and financial burdens due to high out-of-pocket costs and coverage caps.
Key features of the ACA relevant to students
ACA sought to simplify the healthcare insurance market. The act has many features that sought to ease life for Americans. These are the features of particular interest to students from abroad:
1. ACA Exemptions for International Students
F-1, J-1, and M-1 visa holders are exempt from ACA requirements for their first five years in the USA. This is because they are classified as non-residents during that period for tax purposes.
The ACA’s mandate, which made health coverage mandatory, was repealed in 2019. However, some states – New Jersey, Vermont, California, Rhode Island, Massachusetts, and the District of Columbia – have their own rules.
After five years in the USA, an international student transitions to resident alien tax status if they meet the criteria. Thereafter, they are required to purchase ACA-compliant coverage.
2. University Health Insurance Rules
Many universities, such as NYU and UC Berkeley, require ACA-compliant plans. This is mandated even if the student is exempt (as explained above).
However, some universities may allow a large plan with $500,000 coverage in place of an ACA-compliant plan.
3. Coverage Limitations for International Students
US healthcare plan providers do not have to cover pre-existing conditions for international students.
Many ACA plans exclude overseas treatment. This prevents students from traveling abroad during their study period.
Also Read: How Fundright Helps You With Affordable Education Loan To Study In Canada
ACA healthcare coverage benefits for students
The Affordable Care Act of 2010 provides several healthcare coverage benefits that apply to students. Here are the key benefits of ACA:
1. Essential Health Benefits
All ACA-compliant plans must cover 10 essential health benefits by law. These are:
- Preventive care, including vaccines, screenings, and annual check-ups
- Emergency services for accidents and other immediate care scenarios
- Hospitalization for the entire duration of illness
- Prescription drugs and supplements as prescribed by a medical practitioner
- Mental health services, including grief and trauma counseling
- Maternity and newborn care
- Pediatric services for young children
- Laboratory and diagnostic services
- Rehabilitation services such as physiotherapy
- Outpatient care
2. Coverage for Pre-Existing Conditions
Under ACA, insurance companies cannot deny coverage due to pre-existing conditions
3. No Lifetime or Annual Limits on Coverage
ACA prohibits any upper limit for coverage. There is no annual cap for the amount you insure.
4. Access to the ACA Marketplace
Students can access the healthcare marketplace and buy a suitable plan with all the benefits of ACA.
Understanding student healthcare mandates under the ACA
The Affordable Care Act introduced several mandates that affect students studying in the USA. Understanding the current mandates will help you buy a suitable healthcare plan for your unique needs:
- From 2019, the federal government in Washington, DC, no longer imposes a penalty for not having health insurance. This means a student may or may not buy a healthcare plan, but there is no penalty for not doing so.
- A few American states, such as California, Massachusetts, New Jersey, Rhode Island, and Vermont, have mandatory requirements in place. All residents, including students, need to have health insurance or pay a state penalty.
This means you have the freedom to opt for a plan that is not ACA-compliant.
Affordable coverage options for students
International students studying in the United States need access to affordable health insurance plans. Below is a table summarizing some affordable options:
| Plan Name | Coverage Details | Monthly Premium | Deductible | Eligibility | Key Features |
| WellAway Royal Plans | Designed for international students and scholars, meeting F-1, J-1, and M-1 visa rules. | Varies by coverage | Moderate deductibles | International students, including exchange scholars. | Visa-compliant, comprehensive coverage, and travel assistance. |
| IMG Global Student | Extensive health coverage for accidents, sicknesses, and emergency medical evacuation. | $50–$160 | $100–$550 | Full-time students at USA institutions | Includes repatriation services, mental health benefits, and 24/7 emergency support. |
| ISO Student Care | Coverage for medical emergencies, illnesses, and injuries, including prescriptions. | $30–$100 | $100–$510 | International students on F-1/J-1 visas | Budget-friendly rates, broad USA hospital and doctor network, meets most school policies. |
| Compass Silver | Mid-tier plan for budget-conscious students, covering major medical needs. | Varies by coverage | Affordable rates | Cost-sensitive international students. | Covers hospitalization, doctor visits, and prescriptions, access to United Healthcare network. |
| WellAway World Elite PLUS | ACA-compliant plan with full benefits and $0 deductible. | Varies by coverage | $0 deductible | Students at universities requiring ACA compliance. | Preventive care, comprehensive benefits, and global access. |
| Secure Scholar (HCC) | Different plan tiers: Basic, Plus, and Premium. Covers injuries, maternity (limited), and general medical care. | $30–$220 | $250–$560 | Students on F-1/J-1 visas, studying outside their home country. | Adjustable coverage levels, optional sports injury protection, and accident-related dental care. |
| Patriot Study Plan | Insurance designed for international exchange students, including travel medical benefits. | $50–$100 | $260–$1,100 | International students, exchange visitors, and scholars. | Tailored for J-1 visa holders, includes athletic injury coverage and travel support. |
| Cigna Global Student | High-end worldwide medical insurance with access to healthcare networks in the USA and abroad. | $100–$300 | Varies by plan | Students pursuing education in the USA or globally | Vast medical provider network, round-the-clock multilingual support, and personalized student coverage. |
| Compass Bronze | Basic plan covering essential medical needs at a lower price. | Varies by coverage | Lowest premiums | Healthy students with minimal medical needs. | Emergency care, doctor visits, and prescriptions, United Healthcare network. |
| WellAway World Elite 250 | ACA-compliant with a $250 deductible for cost-sharing balance. | Varies by coverage | $250 deductible | Ideal for students wanting extensive coverage with a reasonable deductible. | Covers hospitalization, prescriptions, and emergency services. |
| Compass Gold | Premium-level student health plan with comprehensive medical benefits. | Varies by coverage | Low deductibles | Students needing top-tier coverage. | Waiver-compliant for most USA universities, access to United Healthcare network. |
| Compass International | Affordable health coverage created for students and scholars from abroad. | $55–$130 | $102–$408 | Students and scholars with valid US visas | Budget-friendly plans, meets most school regulations, and global assistance support. |
How the ACA impacts international students in the USA
The Affordable Care Act has multiple implications for international students studying in the United States. We provide a detailed overview based on the available information:
1. Exemption Due to Tax Status
International students holding F, J, or M visas are considered non-resident aliens for tax purposes. This period extends for their first five years in the USA.
This exempts them from the ACA mandate. The mandate requires those who live and pay taxes to maintain minimum health coverage or face penalties.
2. Transition to Resident Alien
After five years, an international student transitions to a resident alien status. At this time, they become subject to ACA requirements. They would need to purchase health insurance that is according to ACA standards.
3. School-Specific Requirements
Though they are not legally mandated to buy an ACA-compliant health insurance policy, the institution might insist on it. Some universities require students to provide proof of ACA-compliant coverage.
4. Insurance Plan Options
International students can purchase private health insurance that suits their needs. Many of these plans do not meet ACA standards but can satisfy university requirements.
The ACA has influenced how insurance companies design their products for students in the USA. It’s crucial that you buy affordable coverage options that offer the benefits of ACA for students in case there is a medical emergency.
Comparing ACA coverage with other health insurance plans
When you are shopping for a health insurance plan, you must know the differences between ACA-compliant plans and general international student health insurance. Here is a comparison of ACA vs. International Student Health Insurance Plans.
| Feature | ACA-Compliant Plans | International Student Plans |
| Eligibility | USA citizens, permanent residents, and tax-resident aliens | F-1, J-1, M-1 visa holders (non-residents) |
| Monthly Premiums | $100 – $300+ | $30 – $250 |
| Annual Cost | $3,000 – $7,000+ | $1,500 – $2,500 |
| Subsidies & Discounts | Available for eligible low-income US residents via tax credits | No subsidies available |
| Deductibles | Typically $0 – $1,500 | $100 – $550 |
| Out-of-Pocket Maximum | Capped (varies by plan, often $8,700 individual, $17,400 family) | Varies with plan. Some plans have no cap. |
| Preventive Care | Fully covered (vaccinations, annual checkups) | Limited or not covered |
| Pre-existing Conditions | Covered with no waiting period | May have a waiting period (6–12 months) |
| Hospitalization | Fully covered after deductible | Covered, but limits may apply |
| Emergency Room (ER) Visits | Covered and co-pays may apply | Covered, but with higher co-pays/deductibles |
| Doctor Visits | Co-pays or fully covered | Covered, but may have restrictions on network |
| Prescription Drugs | Covered with co-pays or deductible | Limited coverage. It can be reimbursement-based in some plans |
| Mental Health Services | Included (therapy, psychiatric care, substance abuse) | Usually covered, but fewer sessions allowed |
| Maternity Care | Fully covered | Maybe covered with limitations |
| Dental & Vision | Available with additional premium | May include basic emergency coverage |
| Medical Evacuation & Repatriation | Not included | Standard in most student plans |
| Sports & Activities Coverage | Not included unless extra coverage is purchased | Often includes recreational sports, optional rider for high-risk sports |
| Telehealth Services | Included in most plans | Included in some plans |
| Travel & Global Coverage | Limited to emergencies outside the USA | Included in many plans for international students |
| Compliance with University Requirements | Meets ACA-mandated school requirements | Focuses more on university requirements |
| Flexibility | Limited plan choices | Multiple plan levels (basic to comprehensive) |
There are many affordable coverage options for students, and we have compared only a few. Health insurance providers in India, such as Star Health Insurance and Tata AIG, offer multiple plans for Indian students going abroad.
Navigating US health reforms: A guide for students
Understanding health insurance regulations in the US is quite complex. For international students, it can be difficult to understand the provisions of the Affordable Care Act 2010 and its requirements.
Here is what you must know:
- ACA plans provide long-term coverage for resident Americans. But they are expensive and not required for most international students.
- International student plans are a more affordable and institution-friendly option. They are designed to cover medical emergencies and basic healthcare needs during a short-term stay of a few years.
- University-sponsored health insurance plans are health insurance plans offered by universities to students. The cost is included in annual fees, and students are automatically enrolled when they start their program.
- You must consider benefits like mental health support and emergency evacuation when choosing a health insurance plan.
By comparing available plans, international students can make informed choices to secure the best medical coverage for studying in the USA.
GradRight’s insights on affordable health policies for students
We have explained to you all about the various provisions of the Affordable Care Act, 2010. We have also updated you about changes in the law in the past 15 years.
Students find it difficult to buy a health insurance plan that offers maximum coverage at a minimum cost. With GradRight, you can explore student health insurance plans that offer better coverage and savings. Our plans can help you save up to ₹1.5 lakhs per year compared to university-sponsored options.
Join thousands of students who have purchased the best insurance plans for their USA studies with GradRight. Sign up now, and we shall guide you to the most affordable coverage options
FAQ
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Are international students eligible for ACA healthcare coverage?
International students can buy ACA healthcare coverage. But being non-resident aliens (that is a tax term for non-Americans), they cannot avail of the tax benefits.
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How can students find affordable health insurance under the ACA?
ISO, Cigna Global, International Medical Group, and GeoBlue all offer excellent medical insurance policies that are ACA-compliant. You can buy insurance from their site and pay by card.
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What are the key ACA coverage benefits for USA students?
ACA-compliant plans must cover 10 essential health benefits:
• Preventive care
• Hospitalization
• Emergency services
• Mental health treatment
• Maternity care
• Prescription drugs
• Pediatric services
• Outpatient care
• Rehabilitative services
• Laboratory services* -
What are the healthcare mandates for students under the ACA?
Here are the current mandates:
• Students do not have to mandatorily buy ACA-compliant insurance products when they receive their visa.
• In some states, they have to buy ACA-compliant insurance due to state-level mandates. These states include New Jersey, Vermont, California, Rhode Island, Massachusetts, and the District of Columbia.
• The university would almost always ask if the student has an ACA-compliant plan as a condition for admission.
Thus, it is not required by federal law, but for all practical purposes, students need a health insurance plan that is close to ACA compliance.
