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End Note

Covering the Shadow Uninsured

What institutions can do to help ensure the health of their student bodies
University Business, Mar 2009

ALL YEAR LONG, BUT THROUGHOUT the colder months in particular, health care needs inevitably arise. But for college students, particularly those in traditionally underserved minority groups, access to health care may be as slippery as the roads they come to school on.

Why? Because college students represent one of the largest groups of uninsured or those lacking access to care. According to the American Medical Association, an astounding 23 percent of these students are uninsured.

Colleges should allow financial aid programs to cover the cost of health insurance.

Even if they have insurance, they may not be able to access care. The Government Accountability Office (GAO) reports that often colleges refuse to accept a student’s private health insurance. The result is that college students alone account for up to $355 million in uncompensated care costs annually. Health care reform by the Obama administration must take into account these “shadow uninsured.”

Since two-thirds of students have access to health insurance coverage as dependents through employer-sponsored plans, students should be permitted to use their private coverage on campus and not pay again for redundant coverage from a university. Indeed, because the GAO found that often these college-sponsored plans are inferior—with benefit ceilings as low as $30,000 and significant coverage limitations—private insurance is essential for substantive health coverage.

Some of the school-sponsored plans also do not spend an adequate amount on health care services for beneficiaries. There are even plans that spend less than half of the traditional 80 percent of the premium dollar. Such concerns and potential conflicts of interest between schools and insurers has led New York Attorney General Andrew Cuomo to investigate these relationships.

For those without insurance, schools should offer health insurance “financial aid” scholarships to allow uninsured students to purchase standardized plans using existing state law criteria for the small group or individual markets. Providing these students with adequate health insurance keeps them healthy and able to learn effectively. It also promotes positive health behavior—as opposed to high-risk activities such as self-treatment, avoiding clinic visits, and online purchasing of medications without physician oversight.

There is a strong public policy in favor of providing the uninsured subsidized access to services. For example, the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, and the Office of Inspector General have all noted that discounts can be provided to uninsured and underinsured patients in programs to promote access to care, and nothing prohibits such efforts.

Finally, colleges should expressly include the cost of health insurance premiums for the uninsured student in the school’s cost of attendance. By doing so, health insurance will be considered part of a student’s financial need, allowing financial aid programs to cover the cost of health insurance as part of the student’s financial aid package.

Many students in the United States are one accident or illness away from losing their health, education, and accompanying present and future opportunities. As California Insurance Commissioner Steve Poizner has noted, “An unforeseen illness could spell catastrophe for an uninsured college student and their family.”

A combined approach will address the challenges of the shadow uninsured and allow these individuals to maximize their potential in the educational process. By seeing to it that education institutions promote a healthy student body, we invest in and secure our future.

Bryan A. Liang is executive director of the Institute of Health Law Studies at California Western School of Law and co-director of the San Diego Center for Patient Safety at the University of California, San Diego, School of Medicine.