Colleges' Health Insurance Fees Questioned

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Colleges, state legislators and even federal officials are taking a closer look at how student health insurance and medical care is provided in colleges and universities across the nation.

In some cases, parents of college students are paying double the cost of health insurance for their children. And some children — who have insurance through their parents' health plans — are finding they aren't covered for services at their colleges at all.

Today, students at most four-year schools must show proof of health insurance as a requirement for admission. But, typically, when students show up at the school clinic for health care, they're told they can't use their private health insurance.

When his son went to a private college on the East Coast, Bill Beyer, a health benefits consultant for the federal government, forked over the tens of thousands of dollars it cost to cover tuition, housing and meal plans.

Then one day, a friend asked Beyer whether his son had health insurance through him or through the college. Beyer got out the school's bill and took a hard look, but found that wasn't much help. "I couldn't tell by the bill whether I was paying for the health services and health coverage for my son at school or not," he says.

So Beyer called the school and officials told him that, yes, in fact he was paying for health insurance for his son. The cost: about $1,100 per semester. Since his son was already covered through Beyer's insurance policy, he asked if he had to pay the school's health services cost.

The school told him no. He could certainly get a waiver. But it wasn't all that easy.

"I would have to prove to them that I had health insurance on him," Beyer recalls. Once he did so, the college waived their health fee for that semester. But Beyer is irked that he wasn't reimbursed for the thousands of dollars he had already paid. He's also bothered that the health insurance fee was buried in the overall tuition cost.

"They make the assumption that you're going to accept their health coverage and they just include it in the overall tuition cost. I think it's backward," Beyer says. "They should assume everybody has health coverage and then if you want to opt into health services, you should be allowed to do that."

But that's not the way it is at most colleges today. Health centers range from one-room, one-nurse operations at small rural colleges to full-service facilities at the country's largest universities. But one thing they have in common: They charge a health care fee for insurance or the health clinic itself. And, as in Beyer's case, that cost may not be clearly stated on the bill.

At the same time, most colleges and universities don't take private health insurance. Beyer says that meant his son's United Health card was essentially worthless even though Beyer was paying about $5,000 per year for family coverage, which included his son. While his son was allowed to opt out of the school's insurance, the campus clinic didn't take private insurance. So his son must pay any fees up front and hope he gets reimbursed by United Health, which is not often the case.

Dr. Bryan Liang, who directs the Institute of Health Law Studies at California Western School of Law, says a recent federal survey reported that 80 percent of college students are insured under their parents' health plans.

"If you have the elite calling card of private insurance, you'd think you could go anywhere," says Liang. "But, in fact, at these islands of university campuses, your calling card is not worth anything at all. It's no better than if you were an uninsured student there."

So most students have to pay up front and then go back to their parents' insurance company and hope the company will reimburse them. Liang says most don't get reimbursed.

"If you have ever had any personal experience with an insurance company and tried to get reimbursed, you know it's a very difficult, Byzantine effort with all the forms," he says. "Most people don't have the time or sophistication to try to get those things reimbursed."

Liang points to a recent survey that found that less than one-quarter of those college health clinic fees get reimbursed. And costs can really add up if students need prescription drugs, X-rays or lab tests.

"You have to change with the times," says Liang. Some schools, he says, are trying to hold tightly to the time when colleges could charge a health fee and parents just paid it without question. That approach won't work anymore.

The attorney general in New York state agrees. State officials there are investigating college disclosure policies to students and parents about health fees and insurance coverage. For their part, colleges say it's just too costly and complicated to accept private insurance.

Chad Henderson is director of health services for the University of Rhode Island and president of the American College Health Association, which represents college health facilities.

He says that for most colleges, accepting private health insurance is an administrative nightmare, with "multiple carriers with multiple different policies, multiple different beneficiary bundles ... when you spread that from people all around the country coming to a single institution, it becomes more complex than 'Harry's Urgent Care' located in North Kingstown, R.I." Unlike the college, he says, the small-town clinic gets mostly Rhode Island residents who are primarily insured by private health insurance.

The answer, says Henderson, is to make it simple. And change is coming, says health care consultant Stephen Beckley, in large part due to pressure from parents themselves who want their children to have access to health care, especially for mental health issues.

Some colleges are hiring consultants to handle their insurance claims; that costs money. But if colleges keep their medical costs lower than their insurance reimbursements, they could even come out ahead.

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