Report blasts student health plans
Dom
protections from these predatory carriers,"
================
http://www.boston.com/news/health/articles/2009/11/06/report_blasts_student_health_plans/
Report blasts student health plans
Says less of premium goes to medical care
By Kay Lazar, Globe Staff November 6, 2009
Insurance companies rack up much higher profits on health coverage
sold to nearly 100,000 Massachusetts college students than on plans
available to the general public, according to long-awaited data
released late yesterday by the state. The figures also show that
college-student plans also have higher administrative costs.
The result is that less of the premiums paid by students goes toward
medical care.
The report by the Division of Health Care Finance and Policy shows
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’s used to pay
medical bills.
Students at state schools faced the greatest disparity: 45 cents of
every insurance dollar they pay goes to profit and administrative
costs, according to the report.
For more than a year, students at several campuses have pushed state
regulators to investigate because, they said, the lower-cost insurance
products marketed to them offer limited coverage, leaving many
vulnerable to enormous medical debts after accidents or serious
injuries.
"These profit margins for student health insurance are appalling,"
said Vivian Haime, a 21-year-old junior at Tufts University and a lead
organizer of the Student Health Organizing Coalition. "We know
students that, on top of school loans, also have thousands of dollars
of medical debt."
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. Some plans place significantly lower limits on prescription
drugs and doctor visits. The new report shows that just six students
exceeded caps for hospitalization in the 2008 school year, but 951
exceeded caps for outpatient benefits, the medical services provided
outside hospitals. Combined, the two companies account for about 75
percent of the Massachusetts student market, the report said.
Robert Zirkelbach, spokesman for America's Health Insurance Plans, a
trade association, said he hadn’t read the report, so he was unable to
comment.
After heavy lobbying by the student coalition, Sarah Iselin,
commissioner of the Division of Health Care Finance and Policy, in
February announced that the state would start requiring schools to
track and report data they had never before collected.
Iselin, who is stepping down from office today, said it was "too soon"
to say whether the division would step in with proposed regulations to
rein in profit margins. Instead, she said, the division would probably
continue to monitor the programs and collect more data.
"This report suggests that there may be an opportunity for the state
to work with and support schools in being the most effective
purchasers, to make sure they are getting the best value on behalf of
their students," Iselin said.
She also said the division would study whether the Connector
Authority, the agency that oversees the state's landmark health
insurance law, could create a better product for the student market.
Twenty-year-old state regulations require college students to have
health insurance, but allow insurers to substantially limit coverage,
even if the coverage fails to meet the minimum standards set for other
plans as part of the state's 2006 near-universal health law.
"We are requiring students to have insurance and offering them no
protections from these predatory carriers," said Carol Pryor, policy
director of the Access Project, a Boston nonprofit.
The Access Project has long lobbied regulators to allow students to be
eligible for state-subsidized insurance that is available to other
residents with similar incomes. Iselin, the commissioner, declined to
say whether the state would now consider that request.
Health Care for All, a large consumer group, said its time for the
state to take action.
"We think the administration has the authority now to put the brakes
on these outrageous profits and administrative costs," said Brian
Rosman, the group's research director.
"It's clear now that students are being gauged by these out-of-state,
for-profit companies that are making enormous profits, way out of
proportion with the rest of the health insurance market in the state,"
Rosman said.
Most of the 14 insurance companies that sell to students are from out
of state. The local ones, Blue Cross and Blue Shield of Massachusetts
and Tufts Health Plan, had substantially smaller profit margins and
administrative costs, according to the report. Blue Cross, which sold
to just 1.4 percent of the student market, had a 2 percent profit
margin, the same as that of the private market, according to the
report. Tufts Health, with 1.6 percent of the student market, actually
reported a 2 percent loss on its student product.
Kay Lazar can be reached at kla...@globe.com.