Most parents sending their kids off to college probably assume, with good reason, that any medical expenses there will be covered; after all, nearly 70 percent of undergraduates are covered by employer insurance plans—usually through their parents—and the Patient Protection and Affordable Care Act has been lauded for allowing young adults to remain on their parents' plans after graduation, until they turn 26. The bad news: even when college kids do have health insurance, chances are it won't pay the bills.
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As New York Attorney General Andrew Cuomo pointed out in April, most college health centers only accept school-sponsored insurance plans, so students should expect to pay out of pocket for treatment on campus unless they're willing to purchase the school plan, which typically cost more than $1,000 annually. But the alternative—heading off campus for treatment by a community physician—is oftentimes a tough task for kids without cars and at colleges in rural areas where doctors are not numerous or nearby. "Many insured students don't have access to care on campus," says Bryan Liang, executive director of the Institute of Health Law Studies at California Western School of Law, who has done extensive research on campus health policies. "When they get to school, these students are effectively uninsured and run into the same problems they would outside campus if they didn't have insurance."
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After his investigation into campus health practices, Cuomo cited problems in a letter sent to more than 300 schools in New York. The key issues Cuomo raised include the reluctance by schools to accept any outside health insurance, the insufficient coverage provided by many school plans, and potential conflict-of-interest arrangements in which brokers provide money to schools and the schools in turn use those brokers to acquire their student health insurance plans. "The question that is central to our investigation is whether the health insurance companies are making huge profits on the backs of college students," says Benjamin Lawsky, special assistant to Cuomo. "What they should be doing is providing the needed coverage to students, who are typically a very healthy population, and not harming them in any way."
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The probe uncovered numerous relationships between schools and brokers that irked investigators. For instance, the brokerage Hagedorn and Company donated $83,460 to Pace University from 2003 to 2008 to help fund awards dinners and golf tournaments. During that time Pace used Hagerdorn as broker for its student insurance plan, which is mandatory without a waiver. "We feel the relationship is completely appropriate," says Tom Torello, vice president of university relations at Pace. "If there was any way we were favoring them, that would be an issue, but we're not. We review those contracts every year competitively and go for the best service for the money." James Keidel, the broker's attorney, points out that "Hagedorn makes charitable contributions to organizations regularly. They give to both clients and non-clients."
Cuomo's office is urging schools to avoid such arrangements and to ultimately provide better care for students by closing major coverage gaps. "There's the threat of investigation and possible prosecution," says Colin Zick, an attorney at Boston law firm Foley Hoag who specializes in health care and compliance matters. "It's embarrassing to get a subpoena... In the competitive educational marketplace you don't want students to see that. It doesn't reflect well on the institution."
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