Colleges around the country are heeding the recommendation of the American College Health Association and requiring students to demonstrate proof of insurance as a requirement for college enrollment. In the state of Massachusetts, for example, every full and part-time student registered at a university or college must be in a qualifying student health insurance program (QSHIP) or have a health plan with comparable coverage.
Why? The reasoning is simple. Studies show that lack of health insurance cannot only negatively impact a student’s health, but also their academic performance. There are many policies you can offer students that will help them meet these coverage requirements and help keep them healthy and productive.
Learning the hard way
Studies show that young adults are the age group that is most likely to choose to go without health insurance. Approximately 30 percent of college students in the United States (about 4 million) do not have any type of health insurance. Anyone who remembers the feeling of invincibility that accompanies youth may find this trend to be an intuitive one. This invincible feeling, coupled with the lack of affordable health insurance options and the deficiency of knowledge about health insurance, can quickly lead to an alarming trend of students choosing to be uninsured.
Many students do not realize the far-reaching consequences of this choice. According to the Ohio State University Web site, “There is a growing body of evidence that shows a significant percentage of uninsured students will experience difficulty in obtaining health care in the surrounding community. Many people incorrectly believe that young people need very little medical care. In fact, young adults access medical care regularly when it is available and have a growing need for routine and preventive health care.” While many universities offer free basic health care services through their student health center, relying on this as the sole source of medical coverage may be financially disastrous in case of a serious illness or injury that requires an off-campus visit to a hospital, physician, or diagnostic center.
In the least severe cases, the inability to access routine and preventive health care can lead to recurring illness for the student, causing them to miss class and perform at a lower level than they would if they were healthy. In the most severe cases, a severe illness or accident can leave the student in financial disaster, forcing them to drop out of college in order to work for the money to pay their bills.
Today, most health insurance policies allow a registered full-time college or university student up to the age of 24 to be covered as a dependent under their parent’s policy. Keep in mind, though, that there are plans with no limiting age. This allows the adult child to remain on the parent’s policy until they either become financially independent (filing their own income tax return) or get married. This may provide a comfort level to those students staying close to home, but the coverage may not be sufficient or available for those going away to college. A thorough evaluation of the policy’s coverage area, out-of-network costs, and availability and accessibility to providers should be considered. If any of these areas are lacking or lend room to the possibility of a substantial financial impact, a separate policy should be purchased for the student.
What types of plans should be offered to this target group?
The type of plan offered to this group depends on the client’s needs — and in most cases, the client will more than likely be the student’s parents. This does not take away from the fact that some students or graduates may take it upon themselves to look for health care coverage.
The availability of product choices, such as permanent, short-term medical, or gap indemnity health plans, coupled with affordable premiums should be a component of a health agent’s portfolio. The amount and type of coverage typical of permanent policies or major medical plans vary in co-insurance from 50 percent to 100 percent, with or without a deductible and up to lifetime maximum for hospital, surgical physician, and other related expenses for sickness or injury. Benefits such as preventive care, mental health, prescriptions, vision, and maternity care may either be included or added on as an optional rider to the base policy.
In addition, there are health plans for non-immigrant students studying in the U.S. on an F-1, F-2, J-1, or J-2 visa or for those seeking to participate in a qualified study-abroad program. The majority of universities and international programs require students to obtain health insurance as an acceptance prerequisite. For example, students at the University of Florida seeking to study internationally are required to provide proof of minimum coverage of $200,000. International students studying at Stony Brook University in the state of New York are required to have $100,000 minimum coverage per medical condition with no deductible and exclusions on pre-existing medical conditions.
A short-term medical policy would also be a viable solution to the student insurance market. Short-term medical policies, or STMs, have similar benefits as their counterpart, major medical; however, the benefit coverage is for a specified period of time. These “temporary” plans include coverage for up to 30, 60, 90, or 180 days or one year of coverage, with most having simplified underwriting limitations and plans designed to meet the needs of a temporary life occurrence. Once the benefit period expires, the insured must reapply for continuation of coverage for another specified time frame. If there has been a change in the health of the insured, there may be a declination or modification on the new policy in accordance to the carrier’s underwriting specifications. Unlike short-term medical, a major medical policy is guaranteed renewable and can only be cancelled by the insured or the insurer under the terms and provisions of the policy.
Indemnity policies or mini-medicals are an alternative option for this market as a supplement to existing coverage or as a stand-alone policy. These types of plans may reimburse expenses incurred through deductibles, out-of-network costs, copays, out-of-pocket expenses, or non-covered medical expenditures. Dependent on the type of reimbursement provision of the plan, benefits paid are subject to reasonable and customary, up to paid charges, or plan benefit maximums.
As a stand-alone policy, it is your responsibility to inform the client about the limitations of these plans in comparison to a major medical. Call it a mini-medical, limited benefit, or indemnity coverage, these plans do not maximize protection against medical financial impairments, but they do provide limited coverage for hospitalization, outpatient, physician or surgical expenses, and accidental injuries, up to a specified amount per day or number of visits.
As health insurance continues to become increasingly important and easier to obtain for this market, students and parents are more likely to purchase coverage and protect themselves medically, financially, and consequently, from illness or accident. The time is right to offer these plans to your existing clients or make long-term clients out of a college health insurance sale.
Liz Kenneally is vice president of sales for Oxonia Insurance Group Inc., a national health insurance agency and distributor for major medical, short term, mini medicals, and student health insurance. For more information, email ekenneally@oxoniainsurance.com or call 800-254-1047, Ext. 532. For more information visit www.oxoniainsurance.com.