Use Your Parents' Health Insurance on Campus

Some schools are accepting outside insurance plans and it's paying off.


A vast majority of college health centers only accept school-sponsored health insurance plans, forcing students who visit the center with their parents' health insurance to pay out of pocket for many services. However, a few schools have broken from that model and accept all forms of outside insurance, which has proven to be financially beneficial not only for the students, but for the schools themselves. 

[Read about problems facing student healthcare.] 

Auburn University is one such institution. In the mid-1990's it became apparent to officials that students were displeased with the school's student medical clinic, so the school opted to outsource the entire medical clinic operation, including the insurance billing program, in order to make improvements without charging students more and to accept all forms of insurance. School officials note that the university has saved $27 million to $30 million since the decision was made. By accepting multiple forms of insurance, Auburn has been able to be reimbursed by parents' insurance plans. That money has been poured into the medical facility, allowing Auburn to purchase better technology and for the health center to create a full-time five member billing department. Outsourcing the operation has even allowed the school to drop the health fee that was charged to students as part of their tuition. 

The medical clinic's structure has not only provided financial relief for the school, but better care for students. The clinic's medical director, Dr. Fred Kam, notes that by accepting outside insurance, Auburn's insurance policy has become increasingly competitive with other plans in both price and coverage limits in order to appeal to students. "I think anyone of our comparable size, even smaller than us or larger than us definitely could do this," says Kam. "In today's world, with good practice management systems and technology available, it's really gotten a lot easier to do it." 

But Dr. James Turner, past president of the American College Health Association and executive director of the University of Virginia's student health center, argues that it's far too expensive for schools to accept multiple forms of insurance. Turner says that he'd have to hire a staff of five or more to handle the complex insurance billing process. In the 1990's, UVA did attempt to accept outside insurance, but was unable to accommodate the more than 900 insurance plans that students brought to school. Private physicians aren't expected to accept hundreds of plans, so it's absurd for student health centers to be held to that standard, he says. "It's just financially not possible." 

[Students: use these five tips to navigate healthcare reform.]

Other schools, however, have outsourced the insurance billing or have even been able to handle the billing themselves. Andrew Menter, CEO of Highland Campus Health Group, one of the billing firms, claims that schools ultimately benefit from outsourcing because they get reimbursed for services like simple checkups that are paid for by the health fee that is lumped in with tuition. "Billing private health insurance can help supplement the financial resources, like the health fee, already available to the health center," says Menter, whose firm has 20 clients. "Our clients typically generate incremental revenue equal to 10 percent to 15 percent of their current budget." Turner, however, feels that the commission these firms demand are too costly for schools, and claims billing firms often take a 40 percent to 50 percent slice of the insurance money received for simple checkups.

Auburn's Kam notes that over the past year he's heard from numerous schools nationwide hoping to pick his brain about Auburn's model. Interest is mounting because of more stringent regulations brought about by health reform and the increased scrutiny from regulators like New York Attorney General Andrew Cuomo, who is urging universities to put students' best-interest above their own regarding campus health. "I think we're in a different era of health delivery," Kam says. "Colleges and universities need to rethink, or at least reexamine, what they're doing."