Student health insurance plan could change under new reform

Student health insurance plans have come under fire in recent months. A Sept. 25 Wall Street Journal article called them "among the worst in the nation for consumers." That could change under health care reform.

It is currently unclear whether student insurance plans, which count as neither individual nor group insurance plans, will satisfy federal regulations that will require all U.S. citizens to have health insurance by 2014.

"Officially, we don't know yet, because final regulations have not been published yet by the federal government," said Jim Yankech, senior associate director of the University Health Center at the University of Nebraska-Lincoln.

The American College Health Association, American Council on Education and other groups are lobbying to have student health insurance plans be considered acceptable for the federal mandate. In an Aug. 12 letter to the White House, they asked that student insurance plans be considered under their own label of "short-term limited duration plans."

Yankech said he hopes that college insurance plans will be regulated in the new health care system.

"I know there's a segment that wants student health plans exempted altogether, but we, and many colleges, would be content if the plan were to remain part of health care reform," he said. "We're afraid that otherwise people wouldn't regard the plan as legitimate."

UNL's student health insurance, the Healthy Option Student Plan, includes medical, pharmacy and dental coverage. The medical insurance, which is provided by Aetna Inc., costs $1,503 for a year for one student.

Jennifer Snyder, marketing coordinator for the University Health Center, said between 3,000 and 4,000 students use the health insurance. She said only international students are required to purchase it. The insurance is also part of the benefits package for teaching and research graduate assistants.

Snyder said UNL considered several options two years ago. The process included forming a committee, putting out a request for proposals and interviewing insurance companies. This process is repeated every three to four years.

"After the proposals and interviews, Aetna was the best deal," she said.

Yankech said college insurance plans are often criticized for their lack of coverage and high cost, but he said these criticisms do not apply to UNL's plan. He cited UNL's $400 deductible and $250,000 maximum benefit as evidence that it offers inexpensive, robust coverage.

"I've had conversations with parents who are amazed at the benefits the plan offers," he said.

The Healthy Option Student Plan is not without limitations, however. It doesn't cover all medical costs, and several of the plan's benefits are only accessible at the University Health Center.

For instance, Snyder said, visits to therapists are 100 percent covered if a student visits the mental health professionals at the Health Center. But if a student wants to visit a therapist off campus, insurance will pay only 80 percent of the cost for preferred providers and 60 percent for non-preferred providers.

In addition, prescription costs are only covered if a student uses the pharmacy at the Health Center. Snyder said that because the program is underwritten by the Health Center pharmacy itself, it is unable to offer coverage for off-campus pharmacies. The pharmacy plan also has a limit of $300 in coverage, meaning the insurance only pays for the first $300 of medicine costs. After that a student must pay for pharmaceuticals out of pocket.

Caroline Cheong, a senior dietetics major, was required to purchase the Healthy Option plan as an international student from Malaysia.

"The plan is all right," she said. "It's pretty convenient, because it's hard for international students to look for a medical plan when we get here."

Russ Headlee, a graduate student in agricultural economics, purchased the Healthy Option Student Plan in the fall of 2009. He decided not to renew his coverage for the upcoming year because he didn't think he needed as much coverage as the plan offered.

"It's essentially a full-service health insurance plan. As a 26 year-old who exercises and eats well, I was over-insured," he said.

If student insurance plans are subject to new health care reforms, UNL will have to make some alterations to the Healthy Option plan, Yankech said.

He said that the new regulations would mean the Healthy Option plan would have to remove its lifetime limit, the amount of coverage it offers to an individual over the course of a lifetime. It would also have to extend coverage to dependants up to age 26 and might have to cover additional health costs. Additionally, it would need to increase its loss ratio, or the percentage of the premium that it pays out in health costs. UNL's is 78 percent, and the regulations would require at least 80 percent.  

Yankech said he does not anticipate these changes causing cost increases.

"I predict that it will remain relatively the same," he said. "The student population is generally a healthy population. Even with additional expenses, or risks, we have to assume, I don't expect a significant increase in premiums. I predict student plans may be an attractive option for families with college students."

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