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The Patrick administration is considering an overhaul of the college student health insurance market intended to improve coverage for thousands of Massachusetts students who now have plans with limited benefits.
The administration is looking at several steps, including encouraging schools to band together to purchase higher quality plans at a significant discount, and requiring insurers to offer more generous benefits to college students, who are not receiving the care they should for the dollars they spend, said Stephen McCabe, interim commissioner of the Division of Health Care Finance and Policy.
The issue has taken on urgency after a division report last month revealed that insurance companies are racking up much higher profits on health coverage sold to nearly 100,000 Massachusetts college students than on plans available to the general public. The report also showed that student plans have higher administrative costs.
ÓStudents are not getting comparable value with the insurers who have products in the market today,ÒÒ said McCabe, whose division regulates student health insurance plans. ÓWe want to make sure that the studentsÒ premium dollars buy coverage most effectively.ÒÒ He declined to provide details of the administrationÒs plans.
But McCabe said the administration has concerns with proposed legislation, being considered in a State House hearing today, that would require college plans to meet the same minimum standards set by the state for insurance sold to the general public. Colleges that fail to meet those standards would be fined $1 per student per day. McCabe said the bill, sponsored by Senator Richard Moore, Democrat of Uxbridge, could make insurance unaffordable for college students.
In Massachusetts, the contrast between student and other policies is stark.
ÓItÒs really frustrating that a state like Massachusetts, that is known for providing good care to its citizens, provides substandard care to its students,ÒÒ said Shanna Rifkin, a junior at Brandeis University and a lead organizer of the Student Health Organizing Coalition. ÓAt least people are paying attention now.ÒÒ
The coalition will urge legislators to add more teeth to the proposed bill by requiring that all of the stateÒs college students - there are more than 300,000 - be lumped into one insurance market, which would allow for better quality products at a reduced price.
After heavy lobbying by the student group, the state began requiring schools to track and report data they had never before collected. That information was compiled in the report released last month.
It showed that, on average, 30 cents of every premium dollar goes toward profits and administrative costs, compared with 12 cents for plans sold to the general public. The remainder of the premiums is what is used to pay medical bills.
Students attending state schools face the greatest disparity: 45 cents of every insurance dollar they pay goes to profit and administrative costs, according to the stateÒs data.
Although students are free to buy more expensive policies, many are covered by plans that cap payments at $50,000 a year per injury or illness, leaving them vulnerable to enormous medical debts. Some plans place even lower limits on prescription drugs and doctor visits. The report showed that in the 2008 school year, 951 students exceeded caps for medical services provided outside of hospitals.
Most of those students attended schools that purchase insurance from either Nationwide or Aetna. Combined, the two companies account for about 75 percent of the Massachusetts student market, the report said.
Aetna spokesman Brian St. Hilaire said in an e-mailed statement yesterday that the company works Óclosely with our college and university partners to customize plans that meet the health and financial needs of students.ÒÒ He said Aetna looks forward to working with the state, schools, and students to ensure continued access to Óhigh-quality, affordable health care.ÒÒ
Nationwide spokeswoman Liz Christopher said by e-mail that the company provides Óvaluable coverage to students in Massachusetts,ÒÒ and that it is Óalways working to reduce administrative expenses in order to provide better value and increased medical coverage.ÒÒ
Both companies said their profit margins and administrative costs were comparable to others in the Massachusetts student health insurance market.
Kay Lazar
Source: Boston.com December 2009
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