Magazine article University Business

Ailing College Health Programs: Cures for College-Sponsored Program Woes

Magazine article University Business

Ailing College Health Programs: Cures for College-Sponsored Program Woes

Article excerpt

AMERICA'S COLLEGE HEALTH stems are gravely ill. Unless faculty and campus administrators address these coverage issues, students could be one disease or accident away from losing the education for which they are paying.

Insurers make big profits from college students, but some families are left with huge bills. College-offered health insurance programs often offer little for the money. Benefits ceilings are low--usually $30,000 or less--even though for the same money, better programs are available outside school.

Further, "interior caps" put an even lower ceiling on specific categories, such as surgeon's fees, hospital room and board, and even daily allowed expenditures. Prescription drug coverage is similarly low, and a huge number of exclusions are put into place by college-sponsored plans.

These plans' limited coverage makes them tremendously profitable for insurers. In general, the "loss ratio," or amount spent by an insurer on services, should be about 80 percent of premiums, leaving 20 percent for administration and profit. Yet insurers in plans offered by colleges have much lower loss ratios--some as low as 50 percent--yielding double to triple the standard market amounts. These profits also show that colleges are not getting good deals for their students.

ACCESS DENIED

Things aren't much better for students with insurance through their parents. Surveys show that three out of four students are covered by their family's health plans. While traditional health insurance normally provides access to vital medical services, this access is denied in college health center programs.

Further, these college programs usually carry high out-of-pocket costs for key ser vices such as laboratory and imaging studies--if they are covered at all.

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Some universities justify this situation by saying that the spate of services with limited or no coverage can be reimbursed by the student's or family's health insurance. However, as many of us know, the Byzantine process of forms, receipts, claims, and follow-up make this effort at reimbursement an extremely daunting exercise at best.

College health programs represent financial aid for health insurers paid for by college students and their families. Insurers gain large profits off the deductibles and caps in these plans. They also avoid payment for services provided by denying out-of-network reimbursements. …

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