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Scammed by the State?

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Scammed by the State?

Insurance offered by Idaho colleges "not the best policy" for all

A proposal by the State Board of Education to the Idaho Legislature in 2004 suggested a statewide insurance policy for all Idaho college and university students would be beneficial; this in response to a Board policy which requires all full-time students in a 4-year college or university to have medical insurance coverage. The Board’s proposal stated a statewide plan, offering group coverage, would result in “All students within Idaho [enjoying] such a fine policy and the premiums could be greatly reduced for all students, including those at the University of Idaho.”

The Legislature accepted that proposal, but colleges were stuck with the plans they had negotiated for after the medical insurance was first made a requirement for full-time Idaho college and university students. Currently the state has issued a Request for Proposals for a basic insurance policy that would be provided to students in all state programs: perhaps next year, Idaho students might see that happen. Today, however, the plans offered differ depending on what college they attend.

At Lewis Clark State College, after a competitive bid process, Renaissance Agencies, Inc. was awarded the contract to provide insurance to LCSC’s students through 2010. It is the only Idaho college covered through Renaissance. Students are automatically enrolled in this plan unless they submit a waiver, prior to August 29, to show they already have equal or better coverage in a plan of their own. This is true for all Idaho colleges and universities: enrollment in the different plans is automatic unless a waiver is filed.

A Santa Monica, Calif. based company, Renaissance Agencies, Inc. offers to Idaho students a plan that one local insurance agent has called “horrible.”

“Quite frankly this is a HORRIBLE plan and I can’t believe they would even think of marketing this in good conscience. Shameful!” That was the response of Angela Potts, owner of Summit Insurance Resource Group of Sandpoint, when asked to compare the college’s plan with a simple, Regence plan already in existence for an 18-year-old female student—a plan that doesn’t benefit from group pricing.

What makes the LCSC plan (and other college plans) less than stellar? Look at our chart on the next page to see how well they match the State Board of Education’s intention to “decrease mandatory insurance premiums for our students and increase their health insurance benefits.”

Part of the problem is that each college offers a different plan, something that will presumably be changed for the 2010-2011 school year. And the coverage varies widely. Some plans cover pregnancy; others do not. Some will cover your student if he’s injured playing sports while others cover only some types of sports and still others cover no athletic injuries at all.

In addition, these plans (along with private plans) offer different coverage limits for in-network and out-of-network services. But what is their network? Is your child attending college in Boise fully covered if he becomes ill while home in North Idaho for the holidays?

Another consideration is market share—none of the current college insurance providers has the same market share in Idaho as companies like Blue Cross or Regence (the private company we compared them to). That market share allows the insurance company to negotiate lower prices for services from hospitals and doctors. That can make a huge difference in the dollar amount your 20 percent of non-covered costs adds up to.

A little over 200,000 people in Idaho have no insurance—about 15 percent of the population—and a large number of those are kids aged 19 to 29. In that group, almost 30 percent have no insurance to protect them from financial catastrophe due to the costs of medical care. By 2010, the cost of health care not paid out-of-pocket by the uninsured in Idaho will be more than $324 million.

In a review of student health coverage available at 340 randomly selected colleges, the Government Accountability Office found that annual student health plan premiums range in cost from $30 to $2,400, with some plans excluding or limiting preventative care, prescription drug coverage and other health services. The average annual premium was around $860. Maximum benefit amounts vary from $2,500 per condition, per year (which not only won’t cover the cost of a hospital stay of any consequence, it won’t even cover many tests required when someone is injured), to $1 million per lifetime.

The American College Health Association recently updated its guidelines on student health insurance. Chief among them: “As a condition of enrollment, the college or university requires students to provide evidence that they have adequate health insurance coverage.” Characteristics of “adequate” health insurance identified by the organization include coverage for preventative care, catastrophic illness, and prescription medications, including psychotropic drugs.

The plans currently offered by Idaho colleges and universities simply don’t meet those guidelines. So why does that matter? Because students (and sometimes their parents) often are not well-versed in insurance. The assumption is that if a college offers a plan, that plan must be one of the best you can get. Unfortunately, that’s just not the case.

“Nobody is particularly happy with health insurance right now, but I promise you, if something happens, you’re not going to be happy without it,” said Potts. “As our legislature has recognized, it’s important that college students be adequately covered in case of illness or injury. Medical expenses are responsible for over 60 percent of bankruptcies today, and most of those people have health insurance—inadequate insurance. That’s simply not a good way for a student to start their lives. Despite what you might think when reading about the plans currently offered by Idaho’s higher education institutions, there are affordable plans available that provide good coverage to your student. Please, research what’s available before you blindly accept what’s offered.”

The Idaho Legislature passed a law (HB1105) extending COBRA coverage to students up to the age of 25 for unmarried, full-time students. Explore whether your child’s current plan can be continued, or whether an individual plan, offered by companies like Blue Cross or Regence, might be of more benefit to your student.

If you don’t know insurance, your best bet is to meet with a qualified insurance agent and compare plans—what’s offered on your current plan or, if you don’t have one, what’s available for your child individually, compared with what coverage is being offered by the college. An agent can point out ways you can reduce costs while still keeping the coverage you find essential. What you don’t want to do is simply sign up for the college plan because it’s there.

“Bottom line: students need to learn early to be students not just of knowledge but of discernment, information gathering, decision making and wisdom,” says Potts. Remember, Caveat emptor. Before a college student even gets a chance for exposure to Latin, the decisions they make about their insurance coverage can bring that lesson home all too well—buyer beware.

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Landon Otis

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education, college, insurance, students

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