Campus Health Insurance or Family Plan?

College students often feel invincible, but it's wise to be prepared financially in case of an accident or illness.

Stethescope and money
Stethescope and money

The hard part is in trying to determine what kind of health insurance coverage is best -- the family plan perhaps already in effect or the campus plan offered at the school.

It's not as if insurance is a luxury item that's rarely used: 75 percent of 500 college students responding to a 2008 Center for Student Health and Life survey said they had visited a campus health center.

That's one reason an estimated 30 percent of colleges and universities made health insurance a requirement for enrollment in the 2007-2008 school year, and other states and institutions are considering the same, according to a 2008 U.S. Government Accountability Office, or GAO, study of 340 institutions.

More than half of U.S. colleges offer student health insurance plans, the study found, and many require enrollment or a signed parental statement that the student has comparable insurance elsewhere, says Bryan A. Liang, executive director and a professor in the Institute of Health Law Studies at California Western School of Law.

What's the better way to go -- the family insurance or the college-offered plan? It's a question as loaded as an SUV on move-in day.

College plans: what works, what hurts
College-offered health plan benefits vary, but the GAO study concluded that schools seem to aim at making premiums affordable while providing coverage that meets student needs. The average annual premium? About $850.

Programs for this younger, healthier population tend to be less expensive, says Andrew Rubin, host of HealthCare Connect on Sirius XM radio and a vice president at New York University Langone Medical Center. But they also tend to be limited, with high deductibles and co-insurance.

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Besides affordability, these plans are designed to complement services offered through the campus health center, says Dale Grenolds, a senior vice president at Aetna Student Health.

Another benefit is the convenience of being "'spoon-fed' a plan that will be OK to use at the campus health center," says James Boyle, president of College Parents of America.

On the other hand, Boyle points to low ceilings for catastrophic coverage, high deductibles, short coverage windows (i.e., only during the school year) and the lack of portability when the student moves to another school or into the work force.

What's more, the GAO study found:

  • Preventive services are of minor concern; the plans are more for illness and injury than wellness.
  • Coverage for services, such as allergy testing and treatment for injuries sustained while under the influence of drugs or alcohol, are often excluded.
  • The maximum benefit allowed for all covered services is typically limited to $50,000 per condition per lifetime -- a cap that could be reached in a heartbeat.

Liang feels internal coverage limits are important. A maximum benefit of, say, $500,000 might sound high, but the fine print may reveal a $5,000 limit on surgeon's fees or inpatient per-day costs, or outpatient coverage for all "episodes of care" limited to an amount that wouldn't cover a significant chronic disease for the year.

A provision, for example, that services are restricted to the campus health center could mean a student who needs to be hospitalized can be "stuck with a lower quality, more restrictive policy," says Rae Lee Olson, a principal at Mountain View, Calif.-based Vita Benefits Group. Worse yet, a student with an illness that necessitates moving back home for family support would not be covered, she says.

Last year, Annie Kohut put her freshman daughter, who has a pre-existing condition, on the University of Maryland's health plan, which had pricey premiums but no co-pays or deductibles. "I was pleased that she was able to see a doctor here in Atlanta a few times this past year and the insurance covered it," says Kohut.

But this year, the plan was changed. A student first must visit the campus health center and from there get a doctor referral -- or get the insurance company to approve the visit, Kohut says.

Otherwise, "You pay out-of-network costs even if the doctor you see is in the network. Out-of-network only pays 60 percent," she says. Since Kohut, an owner of a public relations firm, is self-employed, affording health insurance for her daughter on her own isn't a viable option. "I feel pretty stuck between a rock and a hard place," she says.

Still, these plans can be the only option for some, such as graduate students (who often aren't eligible to receive benefits through their parents) or international students (who must, under federal regulation, have coverage), Grenolds says.

Those selecting a college plan must consider postgraduate life as well. With other group plans, benefits can be purchased for up to 36 months based on COBRA law. College plans "don't extend benefits once your relationship with the school ends," says Amir Mostafaie, consumer health insurance expert at eHealth, parent company of the Web site

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