The St. Louis Beacon Nov 16, 2010
Washington University is one of the top colleges in the country, so it’s no surprise that its student health insurance plan, compared to those on other campuses, is better than average.
Every full-time student at the university’s Danforth Campus is automatically enrolled in the school’s student health insurance plan, an annual policy that costs $575 and pays for 80 percent of covered medical expenses at the campus health center.
Students on the plan have a maximum benefit of $500,000. In contrast, more than half of all university student plans max out below $30,000, according to the Government Accountability Office.
Good, however, is not good enough when it comes to meeting mandates set forth in the new health-care law passed by Congress.
For one, starting in 2014, the new legislation bars annual caps, like the $500,000 ceiling in Washington University’s student policy. Also at issue, the new health-care law requires insurers to spend at least 80 percent of premiums on direct medical care, not on administrative costs or profits.
Since students’ plans were negotiated before Sept. 23, when some new health-care reforms went on the books, the plans are exempt from compliance for the remainder of the academic year.
It’s unclear whether student policies will be subject to the new laws in the near future. Insurers, brokers and universities, led by the American Council on Education, have lobbied the Department of Health and Human Services and the White House to exempt student plans permanently from the new mandates.
The industry groups argue that student policies should be exempted from new insurance mandates because they are “limited duration” policies, which typically expire at the end of a semester or an academic year. They believe student policies should be in the same group as limited duration, non-renewable policies similar to low-cost plans offered by employers such as McDonald’s.
On the other side are advocacy groups like the College Parents of America and the Young Invincibles, a Washington, D.C., based organization whose mission is to provide a voice for young adults (18-34) in the health-care debate. Those groups argue that low-cost student plans should be held to the same standards set by the new health-care law.
Many students do not purchase health plans from their schools, as they are covered under their parents’ plans. And the new law allows them to remain on their parents’ policies until age 26. Even so, about 4.5 million students are on college health-care plans and the question is whether they are getting the best deal for their dollars (or, in many cases, their parents’ dollars).
Critics say the insurance industry has taken advantage of students — among the healthiest and the least costly to cover. They argue that student plans should not be exempt from more rigorous federal requirements. Health insurers and some universities argue that their plans provide the best coverage for the lowest cost and that could change without a waiver.
In the midst of that debate came this month’s charged mid-term election. Bryan Liang, the executive director of the Institute of Health Law Studies at California Western School of Law in San Diego, and an expert on the niche market of student health care policies, said the results may provide some momentum for providing a waiver if it’s seen as a vote against a broader federal role in health care.
If that’s the case, Liang lamented, it will be to the detriment of students, already one of the most under-represented groups in the health-care debate.
“From the legal point of view, these plans shouldn’t get exemptions,” he said. “They’re not short-duration plans and they are renewable. The short duration plans aren’t renewable. The (student policies) last up to six months, or a year, so they should not get an exemption. This is not McDonald’s.”
Ethan Slavin, a spokesman for Aetna, wrote in an e-mail that it remains “unclear how health-care reform will impact students in the short and long term.”
“We believe that our plans will continue to meet a critical student need,” Slavin wrote, “and we are working with the (U.S. Department of Health and Human Services) and (the National Association of Insurance Commissioners) and others to ensure that we can continue to meet the needs of students in the future.”
Low costs, high profits
Meeting the needs of students is what universities and insurers claim their plans accomplish.
The American Council on Education’s letter to the HHS and Nancy-Ann DeParle, the director of the White House Office of Health Reform, written in August, states that making such plans comply with the new health-care law “could make it impossible for colleges and universities to continue to offer student health plans.”
Those claims are largely untrue and are based on protecting profits, countered Liang. In the insurance industry, student health plans, in general, are viewed as some of the worst insurance products on the market, he said.
And while student plans represent a niche market in the industry, they’re some of the most profitable for the insurance companies.
“The student groups are saying, ‘Wait a minute,’ ” Liang said. “You shouldn’t be getting any type of exemption. Already, your medical loss ratios (the amount of premium spent on health care versus administration and profits) are 10 to 50 percent. Already, you guys are profiting way too much off the students, and you have a duty to the students. You’re supposed to use those resources to keep them at their books for the longest time, not sell them a crappy product.”
Aaron Smith, a recent Georgetown Law School graduate and a co-founder of the Young Invincibles, said the arguments are very clear.
“What are the protections that students get?” he said. “Are we going to get the medical loss ratio protections, the benefit cap protections? Can the insurers discriminate on pre-existing conditions? It’s the key things that all Americans should get.”
Washington University’s plan is not the norm. Most university plans come with low-benefit ceilings, as low $30,000 to $50,000, while some plans even have lower per-illness ceilings.
According to the Government Accountability Office, more than half of U.S. colleges offer school-sponsored plans, and around 80 percent of college students, almost 7 million people, are covered by public or private insurance.
In the St. Louis area, Washington University, Webster University, St. Louis University and the University of Missouri St. Louis offer