College students, already absorbing tuition bills that are rising faster than inflation, are increasingly facing hundreds and sometimes thousands of dollars in extra and unexpected health insurance costs and medical bills.
The reason: Most campus health centers have not registered as "in network" for the biggest regional health insurers. That means students covered by their family's plan typically can't get reimbursed for many tests and procedures performed by campus health clinics.
In addition, a growing number of colleges are heavily promoting school-sponsored plans, which range in price from a few hundred dollars at Brigham Young University to as much as $2,500 a year at schools such as Brown University. While some plans are generous, others offer comparatively anemic coverage to the students but healthy profits to either the insurance company or the college. And increasingly, schools are automatically charging students for the campus plan unless they provide proof of other coverage each year. A few colleges are even requiring all students—including those who are already covered—to buy school-sponsored policies. Typically, students can't shop for better deals because the colleges approve only one plan.
The conflict adds up to big bucks, since young people generally spend $2,000 to $3,000 a year on health costs, creating a market worth billions.
Registering. The extra costs anger folks like Washington University junior Patricia Wittig. She's had to work extra hours and borrow more to pay the St. Louis-based university $679 this year for health insurance, even though she's covered under her parents' Blue Cross Blue Shield of Michigan plan. "That's not pocket change at $7.50 an hour," she notes.
Colleges defend their practices, saying that they can't afford the costs or hassles of registering with dozens of insurers. Many college clinics, after all, consist of just a few nurses, who provide free, or very low-cost, basic services. But even centers with big staffs and many fees for X-rays, shots, and blood tests say they prefer that students purchase school-sponsored plans. They say that brings down the average premium for everyone and lowers the chance that sick students will put off needed care for financial reasons.
Debra Harp, Washington University's associate director of Student Health Services, says that while studies show that anywhere from 60 to 80 percent of undergraduates already have health insurance coverage, her school found that some of the covered students were underinsured because they belonged to, say, health maintenance organizations that refused to cover care outside their hometowns. Washington didn't want to register as in-network with other plans partly because the 10,000-member student body comes from so many different places that the clinic would have to register with many insurers. The university was also concerned that registering in-network might mean that it would have to treat people not affiliated with the school. "The university is extremely happy" with the insurance plan that won the school's competitive bid, she says.
But to keep the premiums down, Washington and many other schools sell plans that exclude some benefits. Washington's plan, for example, covers about 80 percent of most medical charges but doesn't cover most outpatient prescription drugs. A survey of Massachusetts colleges found that several, including Lesley University and Springfield College, required all students who didn't have other coverage to buy plans that cost more than $1,000 a year but limited benefits for any one injury or illness to just $25,000, which often isn't enough to cover surgery or extended hospitalization. Many other schools such as the University of California-Merced endorse plans with broad exclusions that don't appear in regular insurance policies, such as refusing to cover injuries to students who are intoxicated.
The good news for students, however, is that a few dozen schools have started to accept regular health insurance in addition to their own plan.