College-Recommended Health Insurance Examined By BW

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Business Week recently looked at the healthinsurance market for college students. Some health plans schools recommend forstudents "turn out to be scanty at best and inferior to comparably pricedalternatives" and can "leave families exposed to crippling medicalbills they thought they'd protected against," Business Weekreports. According to Business Week, six out of 10 universitiesrecommend a plan for students and three out of 10 require students to enroll inspecific plans.

Somecolleges negotiate a standard student plan and some then automatically billstudents for the plan unless they or their families opt out of the coverage.Mark Rukavina, executive director of the Access Project, said that college administrators are oftenunfamiliar with the insurance industry and do not negotiate the best deals.

According to the Government Accountability Office, more than half of the plans thatcolleges recommend offer benefits of $30,000 or less. In addition, many plans"have further limits that prevent payout of even modest maximums,"according to Business Week.

Health insurance industry consultants say that the relative health of most collegestudents makes the market very lucrative. According to Business Week,large insurers on average spend about 80% of premiums on care and keep theremaining 20% for administrative costs and profit, whereas a BusinessWeek analysis found that several college-recommended plans spend"well below" 70% of premiums on care (Elgin/Silver-Greenberg, BusinessWeek, 5/8).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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