Bid to track students' health plans called lacking

Advocates say rules need to spur greater coverage

By Kay Lazar
Globe Staff / April 25, 2009
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State regulators are proposing that colleges start tracking problems students encounter with their health insurance coverage, including how many times insurers refuse to pay for care, and also report the amount of profit the companies make on student plans.

The proposed rules, set for a public hearing Tuesday, are the state's first attempt to address students' past complaints that policies tailored to students and marketed by colleges provide unacceptably skimpy coverage, too often forcing students to pay out of pocket for needed care.

But the proposed rules - set to take effect May 1, three days after the hearing - are sparking criticism from students, who say they do not go far enough.

"The most important thing is what's not in the proposed regulations: They don't address the inadequacies at all," said Aaron Marden, a Tufts senior who founded the Student Health Organizing Coalition, a group lobbying for more comprehensive plans. Students plan to testify Tuesday that the proposed rules should also require colleges to offer plans with greater coverage.

Reports suggest that an increasing number of students and their families are saddled with enormous medical bills after accidents or serious injuries because the policies marketed to students provide limited coverage, compared with standard insurance products.

State regulations require college students to have health insurance but allow insurers to substantially limit coverage. As a result, most of the current policies fail to meet the minimum standards set for other plans as part of the state's 2006 near-universal health law.

Although students are free to buy more expensive policies, roughly 77,800 students are covered by plans that cap payments at $50,000 a year per injury or illness. That limit can easily be exceeded after a serious accident. Many also include a $1,500-a-year limit on prescriptions and other out-patient services.

Sarah Iselin, commissioner of the Division of Health Care Finance and Policy, the agency that regulates student health insurance, has said the proposed new rules would be a first step as she weighs whether to make insurers offer more comprehensive student health plans. She said she is waiting for an analysis she commissioned last fall on the financial effect on students if regulators required insurers to provide more generous benefits.

College administrators say the student plans are the best they can find, given the need to balance quality with affordability.

"I don't think we need to mandate that students pay for more than they can afford in health insurance because it's at the expense of their education," said Jay Linnehan, executive vice president of Middlesex Community College and chairman of the committee that selects student health plans for the state's 15 community colleges.

Linnehan said he understands that regulators need to gather additional information from schools to determine whether more substantial policy changes are needed.

Bill Devine - an insurance broker whose company, University Health Plans, sells insurance to the community college system, Simmons College, Suffolk University, and other schools - said the cost of new reporting requirements would probably be passed on to students.

He also predicted that mandatory reporting of insurance companies' profit margins would be unpopular in the industry, which does not typically publish its profit margins, known as medical loss ratios.

Linnehan said that Nationwide, the community college system's insurer, is receiving a 75 ratio, meaning that 25 cents of every dollar students pay to Nationwide goes toward profit or administrative costs, and 75 goes toward medical care.

The state-commissioned report on the financial effect on students of requiring more generous benefits was originally expected in February. But it may not be completed until late May or early June, said Jennifer Kritz, a division spokeswoman.

Tuesday's hearing is 10 a.m. at 2 Boylston St., fifth floor, Boston. Kay Lazar can be reached at