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Considering A College-Sponsored Health Plan? Plan On Careful Study

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The Tampa Tribune

Published: August 17, 2008

Most parents make sure all the T's are crossed and the I's dotted before sending their children off to college.

They've scrutinized every line on the tuition bill. They've signed off on technology fees and parking permits. And they've read the course descriptions on the classes their children are taking.

Yet when it comes to the school-recommended health insurance program, families seemingly devote more time to understanding the spending options on the college meal plan than sorting out premiums, coverages and medical restrictions.

Unfortunately, failure to study the fine print of student health plans can potentially be financially devastating.

Tens of thousands of college students will sign up for school-sponsored health care coverage in coming weeks to cover routine visits to the campus clinic, midnight trips to the emergency room, and hospitalization for injuries from the flag-football game.

The plans are particularly appealing to the growing number of families whose employer-provided medical plan restricts coverage on students or who lack health insurance altogether.

But as a recent Business Week magazine article pointed out, the plans aren't always the best idea.

The story, in the May 19 edition, highlighted the plight of several families who bought college health plans and thought their children were well-covered. Only later, when their student suffered serious illness or injury, did they learn they were on the hook for tens of thousands of dollars in hospital and doctor bills because of bare-bones coverage limits on the policy.

The magazine article concluded, among other things, that many college-sponsored health plans are "scanty at best and inferior to comparably priced alternatives. This can leave families exposed to crippling medical bills they thought they'd protected against."

Also troubling, reported Business Week, was that colleges and universities have "comfortable relationships" with insurers that reimbursed the schools a small percentage to cover administrative costs of their health care contracts.

For their part, several university administrators pointed out in the magazine article that most students and their parents are looking for low prices, that schools aimed to negotiate the best policies with the best benefits.

More than half of the colleges nationwide offered student policies in 2007, according to a report released in March by the Government Accountability Office, the investigative arm of Congress.

The college plans are not free, and coverage, from companies such as UnitedHealthcare, Assurant and Aetna, varies from campus to campus. For example, the GAO report found that some plans "excluded preventive services from coverage and some plans limited payment for benefits such as prescription drugs." Annual premiums ranged from $30 to $2,400, and maximum benefits ranged from $2,500 for each illness or injury to unlimited lifetime coverage.

Many parents tend to be "focused on the cost element, and not the risk element" of the coverage and benefits of the health plan, said Tom Wertz of Kansas City, Mo. He researched health care coverage options before his son's freshman year at Wartburg College in Iowa.

Here, from the editors of the Insurance.com Web site, are some additional questions to ask before purchasing a college health insurance policy:

What is the health plan's definition of an "enrolled" student? Some schools cover students only if they are full time, meaning they must be enrolled in a certain number of credit hours.

If a student is not enrolled in classes - for example, during summer or winter break - do they still have health coverage?

Are the most efficient treatment facilities provided through the plan easily accessible on or near campus?

What services are offered free or at low costs in a campus health clinic?

What rules apply concerning the exclusion of pre-existing conditions? In some cases, insurance companies can refuse to provide benefits for the treatment of medical conditions that existed before the coverage took effect.

Once you have this information, compare the student policy with other coverage options, such as temporary or permanent health insurance.

Finally, parents, consider this an educational opportunity to talk to your student about health insurance.

"This is one of those times that the parents owe it to their child to start talking about it," Wertz said.

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