College Health Insurance Plans
Most colleges and universities require students to be covered by a health insurance plan. Some institutions offer their own plans and some require all students to enroll in the college-sponsored plan. Sometimes these are a good deal – sometimes they’re not and it’s up to you to figure it out. Even if the college requires you to enroll in the plan, you may want to get an additional policy if there are big holes in coverage.
In 2008 the US Government Accountability Office (GAO) published a report on college health insurance plans. The GAO randomly sampled 340 college plans and found that “the plans GAO reviewed varied in the services they covered and how they paid for covered services. Specifically, some plans excluded preventive services from coverage and some plans limited payment for benefits such as prescription drugs. In addition, plans also varied in terms of premiums and maximum benefits, with annual premiums ranging from $30 to $2,400 and maximum benefits ranging from $2,500 for each illness or injury to unlimited lifetime coverage.”
Here are the steps you should take to determine if enrolling in you school’s health plan is a wise decision.
- Get a copy of the “description of benefits” of your college health plan. This might be the called the “benefits brochure” or some other name. It describes what’s covered;
- Figure out the 4 most important aspects of a health insurance plan:
- how much you’ll pay when you see a doctor;
- how much you’ll pay in the hospital;
- what’s the maximum you’ll pay if you have a catastrophic accident or illness; and
- how much you’ll pay for prescription medicine. (For more detail, see Health Insurance 101)
- Look to see if the maximum the insurance company pays for any service is limited – this is common on student health plans where the maximum amount the company will pay might be capped at $50,000 for any specific injury or illness. Also, some plans cap the amount they will pay for prescription medicine at $1,000 per year. These caps protect the insurance company and your school and place the entire financial burden on you if you get really sick. The student plan may still be a good deal – just make sure you understand what you’re buying.
- Look at the “exclusions & limitations” section of the plan. Student plans tend to exclude paying for medical expenses that result from certain kinds of personal behavior. For example, many student plans won’t pay for “injury or sickness caused by…the covered person’s use of alcohol, illegal drugs or use of legal medicines.” Many student plans exclude treatment for injuries resulting from “travel in or upon any two- or three-wheeled motor vehicle,” and “expenses incurred as a result of suicide or intentionally self inflicted injury while sane or insane.” By contrast, permanent individual health insurance plans that you can purchase outside of the university (for example through BenefitsCafe.com) will normally pay medical expenses without these exclusions.
- Read the fine print at the bottom, top and sides of the benefit description to understand your coverage. Feel free to send us a copy of your student plan and we can help you understand what you’re buying. The BenefitsCafe.com phone number is 800-746-0045, our fax is 323-721-7343.
Some student health plans focus on keeping the cost of the plan as low as possible. In order to lower the cost they must cut the benefits. Here are some of the common benefit cuts that could end up costing you (or your folks) tons of money if you get really sick or injured:
- Caps on hospital and outpatient care at unreasonably low levels;
- Excluding pregnancy – rather than treating it as any other illness;
- Limiting the maximum the plan pays (not the maximum the covered person pays) to as little as $50,000 or less per illness;
- Re-starting the pre-existing exclusion limitation for each enrollment period;
- Limiting treatment to only on-campus/university providers.
Not all college student plans have these limitations – but many do. Make sure you understand your coverage. You can get a high deductible permanent individual policy for a very low monthly amount. This might be a good option if your student plan has significant limitations.