This article first appeared in the St. Louis Beacon, Nov. 16, 2010 - Washington University is one of the top colleges in the country, so it's no surprise that its student health insurance plan, compared to those on other campuses, is better than average.
Every full-time student at the university's Danforth Campus is automatically enrolled in the school's student health insurance plan, an annual policy that costs $575 and pays for 80 percent of covered medical expenses at the campus health center.
Students on the plan have a maximum benefit of $500,000. In contrast, more than half of all university student plans max out below $30,000, according to the Government Accountability Office.
Good, however, is not good enough when it comes to meeting mandates set forth in the new health-care law passed by Congress.
For one, starting in 2014, the new legislation bars annual caps, like the $500,000 ceiling in Washington University's student policy. Also at issue, the new health-care law requires insurers to spend at least 80 percent of premiums on direct medical care, not on administrative costs or profits.
Since students' plans were negotiated before Sept. 23, when some new health-care reforms went on the books, the plans are exempt from compliance for the remainder of the academic year.
It's unclear whether student policies will be subject to the new laws in the near future. Insurers, brokers and universities, led by the American Council on Education, have lobbied the Department of Health and Human Services and the White House to exempt student plans permanently from the new mandates.
The industry groups argue that student policies should be exempted from new insurance mandates because they are "limited duration" policies, which typically expire at the end of a semester or an academic year. They believe student policies should be in the same group as limited duration, non-renewable policies similar to low-cost plans offered by employers such as McDonald's.
On the other side are advocacy groups like the College Parents of America and the Young Invincibles, a Washington, D.C., based organization whose mission is to provide a voice for young adults (18-34) in the health-care debate. Those groups argue that low-cost student plans should be held to the same standards set by the new health-care law.
Many students do not purchase health plans from their schools, as they are covered under their parents' plans. And the new law allows them to remain on their parents' policies until age 26. Even so, about 4.5 million students are on college health-care plans and the question is whether they are getting the best deal for their dollars (or, in many cases, their parents' dollars).
Critics say the insurance industry has taken advantage of students -- among the healthiest and the least costly to cover. They argue that student plans should not be exempt from more rigorous federal requirements. Health insurers and some universities argue that their plans provide the best coverage for the lowest cost and that could change without a waiver.
In the midst of that debate came this month's charged mid-term election. Bryan Liang, the executive director of the Institute of Health Law Studies at California Western School of Law in San Diego, and an expert on the niche market of student health care policies, said the results may provide some momentum for providing a waiver if it's seen as a vote against a broader federal role in health care.
If that's the case, Liang lamented, it will be to the detriment of students, already one of the most under-represented groups in the health-care debate.
"From the legal point of view, these plans shouldn't get exemptions," he said. "They're not short-duration plans and they are renewable. The short duration plans aren't renewable. The (student policies) last up to six months, or a year, so they should not get an exemption. This is not McDonald's."
Ethan Slavin, a spokesman for Aetna, wrote in an e-mail that it remains "unclear how health-care reform will impact students in the short and long term."
"We believe that our plans will continue to meet a critical student need," Slavin wrote, "and we are working with the (U.S. Department of Health and Human Services) and (the National Association of Insurance Commissioners) and others to ensure that we can continue to meet the needs of students in the future."
Low Costs, High Profits
Meeting the needs of students is what universities and insurers claim their plans accomplish.
The American Council on Education's letter to the HHS and Nancy-Ann DeParle, the director of the White House Office of Health Reform, written in August, states that making such plans comply with the new health-care law "could make it impossible for colleges and universities to continue to offer student health plans."
Those claims are largely untrue and are based on protecting profits, countered Liang. In the insurance industry, student health plans, in general, are viewed as some of the worst insurance products on the market, he said.
And while student plans represent a niche market in the industry, they're some of the most profitable for the insurance companies.
"The student groups are saying, 'Wait a minute,' " Liang said. "You shouldn't be getting any type of exemption. Already, your medical loss ratios (the amount of premium spent on health care versus administration and profits) are 10 to 50 percent. Already, you guys are profiting way too much off the students, and you have a duty to the students. You're supposed to use those resources to keep them at their books for the longest time, not sell them a crappy product."
Aaron Smith, a recent Georgetown Law School graduate and a co-founder of the Young Invincibles, said the arguments are very clear.
"What are the protections that students get?" he said. "Are we going to get the medical loss ratio protections, the benefit cap protections? Can the insurers discriminate on pre-existing conditions? It's the key things that all Americans should get."
Washington University's plan is not the norm. Most university plans come with low-benefit ceilings, as low $30,000 to $50,000, while some plans even have lower per-illness ceilings.
According to the Government Accountability Office, more than half of U.S. colleges offer school-sponsored plans, and around 80 percent of college students, almost 7 million people, are covered by public or private insurance.
In the St. Louis area, Washington University, Webster University, St. Louis University and the University of Missouri St. Louis offer student health plans. Smaller institutions, like Fontbonne and Maryville, don't but do offer pamphlets for private insurance in their student health centers.
Aetna Student Health, which provides coverage to 540,000 students at more than 200 campuses across the country, is the plan provider at Washington University, St. Louis College of Pharmacy and UMSL.
Webster's student plan provider is United Healthcare Student Resources, another big player in the student health insurance business.
Webster requires all of its students on an F1 or J1 visa, as well as all students living in Webster Campus housing, to enroll in the plan, which has a $2,234 annual premium and offers a maximum benefit of $150,000.
John Buck, the associate dean of students at Webster University, said most students who live off campus have their own insurance policies, but that the required policy for on-campus students and international students is a common-sense measure.
As for the policy itself, Buck said the university has a broker who negotiates the premium rates annually with United Healthcare Student Resources, and added he wasn't sure how the new health-care law would affect the school's policy going forward.
"The broker deals with regulations and state changes," Buck said. "He says, here's what the new regulations say and what they mean, and then we have to find a way to accommodate."
Seeking Clarification
What the new regulations mean for the future of student health insurance plans is uncertain. Colleges want clarification, for example, on whether they will have to offer policies to non-students.
Buck said Webster had instances when people took one or two credit hours a semester to get on the school's insurance plan, a loophole that was nixed when the university required that only full-time students could enroll.
Also at issue is the law barring annual caps. It's likely that a ban on annual caps would raise premiums and could, as the industry groups have claimed, dissuade universities from offering plans. The same goes for mandating that 80 percent of payments go to direct medical care.
Buck said Webster's premiums went up 4 percent this year, while two years before that the premiums remained flat.
"I can tell you that our premium is determined by the claims experience of the previous year," Buck said. "In our negotiations, we have focused on that. I'm sure some part of what we contribute to the carrier helps maintain the website and goes to administration costs. But all of our decisions have been based on claims experience. That's what drives the conversation."
Slavin added that, in general, Aetna's medical loss ratios have been in line with what the new laws stipulate.
"MLRs can fluctuate dramatically from year to year. However, on a national basis, our student health MLR was approximately 80 percent in 2009," he wrote.
Giving Students a Voice
Liang said he first started researching student insurance plans when he was a "poor student" himself. He said he went to pick up a prescription at a pharmacy and was told his student plan didn't cover some basic antibiotics.
"Wow, once I started to look, I started to find some significantly disturbing factors about the medical loss ratio of these plans, the limitations of these plans," he said. "That's when I really got interested and started doing more research."
He was particularly interested in the trend of schools offering their own low-cost policies to students and then underwriting the costs of health care on campus with the money generated by such policies.
With the new law allowing young adults under 26 to remain on their parents' policies, Smith, of the Young Invincibles, said more students and parents may opt for that route. Most colleges require students to accept a campus health insurance only if a student lacks insurance. The Young Invincibles helped start a website to educate students about how to remain -- or get back on -- their parents' plans.
"It's hard because many students are new to insurance," Smith said. "They don't understand what these terms mean, and no one is really explaining it to them.
"It's important that students take a little time and try to figure it out and figure out how much value you're getting for your money. Look at what the deductible is. What are co pays for prescription drugs? Do they cover the basic prescription drugs that you need if you have some kind of condition?"
Congress is unlikely to resolve the question of a permanent exemption until next year.
Liang believes that given the current political climate industry groups will win out and get the exemptions they are seeking. But he and Smith are both hopeful that doesn't happen.
"We really have to work a lot harder on the constituencies themselves," Liang said. "Obama has reached out to the young, so what has to happen is the young have to reach out to him and say, 'Listen, we don't' want these plans to have waivers. We want them to fulfill the requirements.' "
Nate Peterson is a former editor at the Aspen Times and a freelance writer whose work has appeared in the Beacon, Colorado newspapers and the New York Times.