Ready for College?  Ready to be Scammed 

Business Week, May 8, 2008  

Is Your Kid Covered?
Insurers make big profits from college students, but some families are left with huge bills
by Ben Elgin and Jessica Silver-Greenberg  

Six out of 10 colleges and universities now recommend specific health insurance plans for their students, and three of 10 require them. But...many of the policies turn out to be scanty at best, and inferior to comparably priced alternatives. This can leave families exposed to crippling medical bills they thought they'd be protected against. Insurers, meanwhile, have found that the student market can be quite profitable.  

More than half of the insurance plans recommended by colleges offer benefits of $30,000 or less, according to a survey published in March by the General Accounting Office, an arm of Congress. Many plans have further limits that prevent payout of even modest maximums.  Apart from low maximums, insurers can contain payouts by imposing "interior caps" on coverage for particular types of treatment. Sean Marquis discovered the hard way how this works. After turning 26, Marquis, a medical student at Ross University in Edison, N.J., was bumped from his parents' plan. He signed up for the school-sponsored plan with United Healthcare, comforted by its $100,000 overall maximum.  

Last spring, Marquis became dizzy during class. He stepped into the hallway and collapsed, fracturing a bone near his jaw. He stayed in the hospital for 48 hours, and left owing $24,098.  United Healthcare covered only $6,260, because Marquis had hit the $2,500-per-day cap for room, board, and miscellaneous expenses. ...  

If you answer the multiple-choice questions below and e-mail to lessonanswers@mymontebello.com with “Lesson answers” in the subject field, you will be credited toward a “certificate of recognition in community affairs” to be awarded in 2008 by a local nonprofit organization. 

 1. What is a cost along with other college costs which three out of ten colleges require of  students?

(a) Gasoline for commuting.

(b) Health insurance.  

2. What is the danger of health insurance for college students?

(a) A cap on total benefits which does not cover catastrophic illness.

(b) A cap on particular types of treatments.

July 10, 2008