No Freedom Of Choice For CSU Grad Students

Last week we got a call from a lady who is going to be a graduate student at Colorado State University, and needs to get a health insurance policy. Last year, CSU made a requirement (HB 1026) for graduate and international students to have health insurance. The students may either get a policy through CSU’s Hartshorn Health Plan, or they can show proof of comparable coverage obtained elsewhere. The Hartshorn policy costs $1740 for a full year of coverage – $145/month. This is very reasonable, and similar to the price that a 20-something would pay for many of the individual health insurance policies available in Colorado, depending on the deductible selected. But there’s a catch. CSU’s health plan has an annual maximum benefit of $200,000 and a lifetime maximum benefit of $800,000. Yes, the students tend to be young and healthy and claims are probably quite a bit less costly than the general population. But in the case of a serious illness or injury, you don’t want to be peering out from under the umbrella of a policy with a $200,000 annual maximum.

In order to waive enrollment in the health insurance policy that the university provides, students must complete this waiver form, showing that their own coverage is comparable to or better than CSU’s policy. CSU’s policy has a low deductible – only $250, and it covers maternity, which most individual health insurance policies in Colorado do not. In order for students to waive the CSU coverage, they must show that their own policy includes coverage for all of the benefits that are mandated for group plans in Colorado – including maternity care. This is tricky. Only three individual health insurance companies in Colorado still have the option to add maternity (United Healthcare, Assurant Health, and Rocky Mountain Health Plans). And the ones that do are very expensive and have very limited coverage (Rocky Mountain Health Plans currently charges an additional $538.11/month to add maternity to their individual plans). When we have clients who choose to add maternity coverage to a policy, it is because they’re planning on using it. Almost nobody adds it as a just-in-case provision – it’s just too expensive. It’s important to note that while routine maternity and delivery are covered on very few individual health insurance policies in Colorado, all policies are required to cover complications of pregnancy, and all policies are required to cover a newborn from day one (with no medical underwriting) who is added to a parent’s existing policy within 31 days of birth.

When we talked to Maria “Stella” Anderson, Manager of the Student Hartshorn Health Insurance Service at Colorado State University, she made a point that the requirement for routine maternity coverage also applies to men who are attending CSU as graduate students or international students. It is not possible for a man to add maternity coverage to an individual health insurance policy in Colorado, so even if they wanted to, they would have no options available that would allow them to waive the CSU coverage, unless they have access to a group policy elsewhere (ie, through a spouse’s employer, or their own employer if they are working and attending school at the same time).

Vickie Bajtelsmit, a finance professor at CSU, recently wrote an article about choosing a health insurance policy, and advised against getting a $250 deductible. Her recommendation was similar to what we tell our clients – go with a slightly higher deductible in order to lower your premiums, and budget for the small stuff. The point of health insurance isn’t to cover the small claims here and there. It’s there to CYA in case something serious happens. For that to work, you better have a policy that won’t cave under the weight of a large claim.

The requirement that “comparable” health plans cover maternity puts CSU grad students between a rock and a hard place. They can choose to spend several hundred dollars a month to get an individual health insurance policy that does cover maternity (whether they’re planning to use it or not), or they can go with the CSU health plan option and have an annual maximum benefit of $200,000. Neither one sounds very good to me. I have a friend who had a baby earlier this year, 9 weeks premature. The EOBs have started rolling in, and so far they’re up to $250,000. It’s a good thing my friend’s health insurance policy didn’t have a $200,000 annual limit.

I don’t mean any disrespect towards CSU with this post. It’s my alma mater afterall. And low annual and lifetime maximums are pretty standard with college health insurance plans. But grad students should have more choice in the matter. An individual health insurance policy that adheres to state mandates for individual policies should be acceptable coverage. This would give students a much wider array of choices, keep the prices affordable, and allow students to choose smart plans that have higher benefit maximums.

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for healthinsurance.org, medicareresources.org, Verywell, Spark by ADP, and Boost by ADP, and Gusto. Follow on twitter and facebook.

Comments

  1. Louise:
    Thanks for letting us know of the health insurance environment for college students in Colorado.
    It would seem that a viable option would be to go with the CSU plan, and add a rider whose deductible starts at $200,000 for annual benefits, and $800,000 for lifetime benefits.
    According to Jay, this should be very inexpensive.
    Don Levit

  2. Don:
    Yeah, I’m not sure how something like that would be priced, since there’s no such thing. I think the more viable option would be to allow the CSU students to just purchase currently available individual/family underwritten plans like at the other universities in Colorado. There are several advantages to this:

    1) They exist
    2) You reduce the complication of having to purchase multiple coverages, the current system is already complicated enough.
    3) You can be wise by having a more reasonable deductible (as recommended by insurance and finance professionals like CSU finance professor Vickie Bajtelsmit) and not be wasting money on a low deductible.
    4) You get a lifetime maximum that doesn’t leave you open for bankruptcy.
    5) You aren’t paying for things like routine maternity if you don’t need it (individual plans still cover complications of maternity under Colorado regulations).
    6) You will still pay less for all of this in one plan than you’ll pay for just the CSU Hartshorn plan by itself.

    So CSU wants to force these people to have health insurance – fair enough, that’s a different discussion. The really unethical thing they’re doing is forcing their students to pay more for a plan that doesn’t even meet the definition of insurance and leaves them exposed for bankruptcy. Students go bankrupt all the time on these low limit university plans, but the students had the choice of purchasing better coverage. CSU is now leaving themselves open for a lawsuit the next time somebody exceeds their coverage limits on the CSU plan after they were forced off of their previous insurance plan that had adequate coverage. The rule only applies to graduate and international students, but it won’t be long before it happens.

  3. Jay:
    How do you know this coverage does not exist?
    Have you inquired with the currect insurer for CSU students?
    If not available as a rider, they would be the logical choice to create one.
    If not, aren’t there stop-loss insurers in Colorado that write coverages with a specific stop-loss of $200,000?

    You may be aware that the IRS recently offered an opinion that with an HSA, that an insured could have secondary coverage that starts where the HDHP ends.
    For example, a plan with $1million of lifetime benefits could add a secondary policy whose coverage starts at $1,000,000.
    You may have several clients who may want to avail themselves of this opportunity.
    Don Levit

  4. Don:
    I don’t know of anything like that. Let me know what you find.

    Even if there were anything like that, it would be a waste. Going back to our discussion of how actuaries price lifetime maximums, you would be better off getting the higher lifetime maximum (of say $2 million to $5 million) on the same policy. The expensive part of the policy is in the low deductible.

  5. This mandate has been such a big issue for me. Partly it is the staff and partly it’s the ridiculous micromanagement of our personal lives from the school. The staff has lost all of the insurance copies I have sent them in 2 different occasions, as well as a new package I gave them in person, and yet they were not taking any responsibility for this and denied my waiver. I have resubmitted my information and now they are questioning things about my insurance that are not even part of the waiver process! I feel this is a very condescending act from the school, requiring us to have their healthcare and not being able to make a choice when it comes to our health. I am a married professional woman, and until now, my health care coverage has been my choice. Now I feel I am going through an uphill battle with the school in order to let them know that I prefer the $3 million annual limit my insurance offers me. Not only that, but I have been paying for a maternity waiver for 2 years, doubling its value – I would lose this if I change insurance companies. Not to mention the extra amount of money I’d have to pay for my husband!

    I would like to know what we can do to reclaim our rights and freedom to choose our personal care and health coverage.

  6. Linda Hunerdosse says

    My husband and I are upset with Colorado State’s insurance requirements. Our son will soon be starting graduate school there and is already covered with a very satisfactory policy. Why does he need one that covers maternity issues and mammograms, along with other things that do not apply to him? We feel that Colorado State has found a great way to make money in an unethical way. Could you help us with this situation? We would appreciate any advice you could give us. Thank you so much!

    Linda & Ron Hunerdosse
    Fairfield, IA

  7. I started graduate school at CSU last fall and I had an individual health plan that was deemed “not comparable” by the health insurance office. I then had to cancel this plan and get on my mom’s plan that was deemed “comparable”. I turned 25 in November so I was dropped from my mom’s plan and just got an individual plan again. I got out of this whole charade for this first year, but my waiver is only good until Fall 2009. Stella Anderson (who for the record is no longer the manager there) was very rude and unprofessional when having to deal with her. She made the waiver process very difficult and frustrating. I just can’t understand how CSU can force us to take their crappy health insurance. We need maternity coverage, which is absurd and they don’t cover birth control or acne medications (the two things that should probably be covered!) Furthermore, there are no options to make monthly payments as I do now. I can’t afford $950 outright! I am a grad student for crying out loud! Speaking for myself, I could give two hoots about having maternity coverage because I am GRAD student! YIKES! It is virtually impossible to waive this insurance and I don’t see any legitimacy in this whole policy. Who can we talk to about this? I thought for sure that this policy would get abolished because there was SOOOO much controversy surrounding it over the course of the year. It can’t be constitutional for an institution to tell me what my OWN health care coverage should be. It is one thing to require health care, but it is another to FORCE our hands at purchasing and overpriced worthless plan! HELPPPP!

  8. anonymous says

    Here are the best resources that worked for me (I knocked on every door, sent hundreds of emails and made many many phone calls):

    – The dean of the college of liberal arts
    – the Graduate Student Council President
    – Paul from Summit Insurance (CSU’s insurance)

    These were not helpful at all (and mostly rude):

    – “Stella” Anderson
    – Anyone in Hartshorn including the director who ignored my calls and emails
    – Colorado department of health insurance
    – Colorado department of higher education
    – anyone who has been involved in passing the bill that allowed this to happen

    If you were able to get your waiver, next time you need to turn in your petition, turn in a copy of the letter you received saying your insurance was comparable with all the other paperwork.

    I have to inform you that the bill does not state that CSU must impose this waiver process. The bill simply states that they can require that graduate students be covered by health insurance. The rest is CSU’s choice of words, bureaucracy and manipulation of the system. It’s a ploy to get more people into the plan so that it becomes a better plan and more affordable (and I’m sure if you follow the money you’ll find specific people behind this). So, it’s not supplying the demand, it’s mandating the demand for a mediocre product in hopes of making it better.

    Not to sound too preachy, but this should serve as a tiny example of what is bound to happen nationwide once our current administration takes over our ability to choose our healthcare. This is just a University, imagine the waiver process at a federal level!

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