Many college health-insurance plans fail to provide students with minimum coverage and often pay out far less in benefits than they collect in premiums, New York State Attorney General Andrew M. Cuomo says.

Plans with low coverage limits, numerous exclusions and high premiums “leave students at risk while providing massive profits for insurance companies,” the high-profile AG and likely NYS gubernatorial candidate said in a statement yesterday. He said his office has subpoenaed 10 insurers that are big players in the college health market as well as five insurance brokers, agents and others in the field.

Aetna, one of those receiving a subpoena requesting information, defended its plans. “The plans are very affordable based on the population; they average about $1,100 a year” and cover students “at home, at school and even internationally,” a spokesman told the New York Times.

A big issue here is the loss ratio — how much of their premiums collected are paid out in benefits. Plans in NYS usually have to have a ratio of at least 65% but Cuomo’s investigation found college plans that didn’t. Under the new federal health overhaul, most large plans, including college-sponsored offerings, the NYT says, will be required to have loss ratios of 85%.

But the federal overhaul will affect the college plans in another way because parents will be able to keep coverage for children until their offspring reach age 26, likely cutting into the college market. Cuomo said the college market — made up of generally healthy students — produces more than $1 billion in revenue for the insurers, which charge premiums anywhere from $100 to $2,500 a year for each policy.

Cuomo has written to more than 300 colleges advising them to check their plans for shortcomings and for conflicts with the new fed rules. No legal action has resulted from any of this, but memories are still fresh about Cuomo’s probe into student-loan practices that shook up a lot of colleges and lenders starting in 2007.

Learn more about International Student Health Insurance

(By James White, WSJ)

Health insurance plans for college students often rip off the students that they claim to serve, a New York State investigation into the policies offered by more than 65 institutions has found.

 Among the problems identified by Attorney General Cuomo and his staff over the course of a 17-month examination: policies that don’t pay for primary care services or prescription drugs, overpriced premiums for the benefits they provide, and atypical coverage exclusions, like not paying for injuries related to alcohol or suicide attempts. The attorney general has also unearthed conflicts of interest and unethical payments made to colleges by health insurance-related companies seeking to do business with them.

  Many colleges require students to buy a private plan selected by the institution if the students can’t show that they’re covered by family plans. The investigation focused on the institutional plans, many of which, Cuomo said, “leave students at risk while providing massive profits for insurance companies.” An insufficient plan, he added, “can have catastrophic and long-lasting effects on a young person’s life.” 

Cuomo’s findings, said James Turner, president of the American College Health Association and student health director at the University of Virginia, vindicate what many college health professionals already see in the field. “The attorney general rightly has expressed concern about poor quality insurance plans,” he said.

 Jim Mitchell, director of Student Health Services at Montana State University and spokesman for the Lookout Mountain Group, which advocates for student health care, said the frauds and inequities exposed by Cuomo are “accurate, and this sort of thing goes on all over the country.” 

Cuomo has asked the presidents of more than 300 postsecondary institutions – most in New York State, but a few dozen out-of-state and enrolling New Yorkers – to reexamine their student health insurance plans in light of his findings and to determine whether they really do meet students’ needs. 

Cuomo also set out half a dozen suggestions for how colleges can best manage their plans, including by providing adequate coverage; controlling their relationships with insurance brokers, agents and consultants; prohibiting college employees from accepting anything of value with service providers; rejecting exclusions like not covering alcohol-related injuries; and maintaining appropriate cost ratios. At institutions that mandate coverage, admissions materials should clearly disclose the cost of a plan. 

Turner applauded Cuomo’s call for improved plans. “His recommendations really affirm ACHA’s position of having very high quality student health insurance benefit plans. Most of his suggestions, in fact, follow the very guidelines we’ve set.” 

Steven M. Bloom, assistant director of federal relations for the American Council on Education, supported Turner’s position. “We agree that colleges and universities should be able to continue to offer low-cost, high-quality plans and that they would meet a certain standard,” he said, making reference to ACE and ACHA’s efforts to make sure President Obama’s health care reform law allowed for student health insurance plans’ continued existence.

 Turner said that “naiveté on the part of the college that’s putting together the benefits program” is also to blame. “Some colleges perhaps don’t look carefully enough into what’s contained in these insurance plans.”

 Laura L. Anglin, president of the Commission on Independent Colleges and Universities, which represents New York State’s private institutions, said student health insurance is an issue her member institutions “take very seriously.”

 David M. Henahan, director of media relations for the State University of New York, said that while the system’s 64 campuses buy policies independently “because there is a great deal of difference in the needs of each SUNY campus,” the system will heed Cuomo’s recommendations. “We’ll look at them, review them and implement them in any way we can.”

 Cuomo’s investigation also included the subpoena of records from 10 of the nation’s largest health insurance companies.

 A spokesman from UnitedHealthcare said the company “continually strive[s] to improve access to quality, effective health care for all Americans, including students,” and has been working with Cuomo to help provide institutions “with affordable coverage that gives students meaningful access to health care services.”

 Matthew Wiggin, head of business communications at Aetna, said the insurer works “closely with the colleges and universities to develop health care plans that meet the health care and financial needs of their students.” The company’s average student health plan costs $1,100 a year, but its benefits vary widely by institutions.

 This is not Cuomo’s first foray into investigating bad business practices in higher education. A Democrat who is widely seen as a front runner in this fall’s New York gubernatorial race — though he has yet to formally announce his candidacy – Cuomo initiated a nationwide examination of student lenders which has resulted in the return of $3.5 million to students and families.

Learn more about International Student Health Insurance

(By Jennifer Epstein, Inside Higher Ed)

In 1994, the U.S. government developed insurance standards for the Exchange Visitor Program. These standards were adopted by many schools as the required minimum levels of coverage for all its international students. The application of these standards was generally a success. Most insurers improved their plans and provided a higher level of coverage. These levels are:
• Medical benefits of at least $50,000 per accident or illness
• Repatriation of remains in the amount of $7,500
• Expenses associated with the medical evacuation of the exchange visitor to his or her home country in the amount of $10,000
• A deductible not to exceed $500 per accident or illness.
Recently, a problem has developed. In an effort to attract students to their low cost plans, some insurance companies developed cheap, limited benefit plans. These technically meet the above requirements but they also include severe limitations. These plans do not provide the levels of coverage they highlight and have provided students a false sense of security. These plans:
• Capped major benefits such as hospital and outpatient care at very low levels. These limits can leave many expenses not covered.
• Some plans limit coverage to one year, or will not renew if the insured has a claim. This will block you from having insurance coverage for that medical condition in the second year.
• Benefits are paid at less than what doctors or hospitals charge (reasonable & customary standards).

These limitations clearly did not comply with the spirit of the USIA/INS regulations and have left many compliant students with unexpected unpaid medical bills.

The following is a suggested course of action:

Become familiar with the insurance plans you are considering. See if they truly provide the coverage they highlight. If they cap outpatient or hospitalization care, consider that the plan benefits the insurance company more than you..

Have questions about your current group or individual plan? 

Learn more about International Student Health Insurance

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