Monday, April 14, 2008

Health Care and College Kids

College kids can have many challenges, but one of the biggest is how to handle health care when they are away from home. Many of them are still covered under the health plan provided to them by their parents' insurance. However, according to a report released this year by the U.S. Government Accountability Office, there are over 1.7 million traditional-aged college students who are uninsured. The number represents about 20% of all kids in college in America. Additionally, the GAO says that only 57% of all colleges offer a student health plan with dramatically varying degrees of coverage. The report also found that students from lower income families, part-time students, and non-white students were less likely to be insured.

Of the 80% of college students aged 18 through 23 who have health insurance, about two thirds of those are covered under employer-sponsored plans. Less than 10% were covered by private insurance, and less than 10% were covered by public programs like Medicaid. The GAO reported also that the characteristics of uninsured students are consistent with the population of uninsured Americans in the general public. Without health insurance, students may not be able to pay for their health care. The cost of treatment may be passed on to federal and state payers, ultimately an expense borne by taxpayers. College students have challenges getting coverage and may not have access to insurance through employers. As they get older, students may also lose dependent status through insurance held by parents.

Premiums range in cost from $30 up to $2400 per year, and many of these college plans do not include or severely limit preventive care, prescription drug coverage and other ancillary health services. Maximum benefits reported by the GAO study vary anywhere from $2500 per condition up to a lifetime cap of $1 million. Colleges customize their plans to reflect their priorities in making premiums affordable for students with coverage that meets the needs of most children while they are attending those institutions. Some plans exclude preventive services and some plans limit payment of benefits. About 30% of colleges nationwide require students to have health insurance, and some states also have health insurance requirements for college students.

The GAO report indicated that limitations on most college health plans were supplemented by student health care services offered by the schools. The plans are coordinated with those services to keep premiums low. Also, some restrictions exist on paying for treatment that is a result of alcohol or drug abuse and for attempted suicide. Part-time students are often restricted from coverage so they do not drive up the premiums for the colleges. And, in addition to information from the GAO, some state governments (Vermont, New York, Massachusetts) make it very onerous for companies to offer low cost health plans to students. Another consideration is that often, ancillary coverage for dental, vision, and other health needs are left out of many plans.

According to Kiplinger, your child might be better off remaining on your policy rather than switching to the plan offered by the school. A report issued in September, 2007, warns parents of college bound children that some student health policies have low deductibles but also have very low limits on coverage. Exposure to uncovered expenses can be dangerous to your financial stability if your college student has a major illness or accident. Some family policies extend coverage up to age 25 if your child is a full time student, and some states have raised that to age 30. A safer route would be to have a policy with a maximum lifetime limit of up to $5 million. Shopping for private insurance can be a daunting task. A good source for finding a broker if you don't already have one is through the National Association of Health Underwriters.

Kiplinger also suggests that parents should check on access to in-network medical providers if their college student is going to school in another city or state. Additionally, to save money on the premium, consider raising the deductible. Young people are typically healthier, and they need insurance to cover catastrophic medical situations. A high-deductible health plan with high coverage limits can be the best way of providing coverage at an affordable price for large unexpected medical expenses. Also, opening up a health savings account (HSA) for tax purposes combined with a HDHP would be a great feature to add on if your child is not considered your dependent. The student could contribute tax-deductible money (which you could give) that can be used tax-free for future medical expenses.

According to, here are some considerations to ponder:
1.) Talk to your college student about how health insurance works and about your health insurance coverage--what to do for various medical needs such as how to file claim forms, ER visits, prescriptions, etc.
2.) Understand the limitations of various health plans and compare options.
3.) Consider the importance of convenience--proximity of health services and providers.
4.) Be aware of certain insurance factors such as discontinuation, certain federal protections, emergencies, out of state restrictions, summer time coverage, independent status, and other concerns that may affect coverage.

Going away to college is a life-changing event for almost every child and parent. For the child, it means that he will need to lean less on Mom and Dad and more on himself. For the parent, it means the beginning of letting go of the person you have mentored and cared for all of his or her young life. The stress of getting to college is daunting in itself, and the stress of going to college can be even greater. With all the activities and responsibilities that college students face, one of the best going away gifts would be to make sure that your young man or woman will be able know how to handle health needs and medical emergencies without worrying. Although most students have a plan, those who do not need to get one. Make sure that your most valuable asset--your health--is protected.

Until next time. Let me know what you think.

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