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Without health insurance, students face burden of paying considerable expenses out of pocket
April 3, 2006 —
You've just torn your ACL while playing sports and you're uninsured. After arriving at the hospital, a doctor informs you that surgery will be required. The doctor performs the considerably difficult surgery and you're forced to stay two nights in the hospital. How much will the care cost?
The table estimates the costs you would have to pay. There are other optional costs, like physical therapy, that vary in price but will also come directly of the pocket of an uninsured person. That is an exceptionally large sum of money, especially for a college-aged student.
Now, imagine that you tore your ACL, but luckily, you have a policy that covers 80 percent of the expenses, so your overall balance would be significantly less. With this coverage, you have saved approximately $9,072. While the $4,128 figure is in no way a trifling amount of money, it's much more manageable than a $13,200 debt, which could require years to pay off - especially if paid with a high-interest credit card. Such debt can be financially ruinous.
Understanding health insurance is a daunting task. There are so many plans, buzzwords, acronyms, companies, and prices that many people - especially students - choose to simply forget about it and hope for the best. According to the Medical Resource Guide, this may explain why of the 41 million uninsured Americans, nearly 50 percent are adults without children or, in other words, the college-aged demographic.
Costs of care considerable
Students are generally not particularly conscious of their coverage, and it's hard to blame them. Most "traditional" students work part-time jobs; such jobs are rarely accompanied by insurance packages. So it makes sense that the phrase "health insurance" hasn't worked its way into the active vocabulary of a college student.
Yet, that is problematic. As more health problems are diagnosed and subsequently treatable, as technology allows for increasingly rapid and effective treatment of problems, and as more people enter the health professions, the cost of health care has increased - dramatically. A torn ACL (anterior cruciate ligament) can cost as much as $11,000 to correct (in addition to room, ambulatory, and/or physical therapy costs). An appendectomy (surgical removal of the appendix) can cost more than $8,500, depending on how severe the case of appendicitis is. Even something as relatively common as braces can cost as much as $5,000; if the corrections required are considerable, that price can shoot up to $8,000.
Policies offered vary in scope
The above are but a few examples of the high cost of health care, and illustrate just how important health insurance is. Suffering a debilitating injury while uninsured has the potential to cause irreparable financial damage. Accordingly, companies have begun to offer reasonably priced insurance aimed at the student demographic.
According to Gloria Hansen, director of Health Services, SVSU offers reasonably priced insurance with good coverage. But the University has sold only 100 policies to its students.
"The number of uninsured and underinsured students is phenomenal," she says.
All universities seek to offer their students some kind of insurance. Typically, a university can pursue one of two options: either require all students to be covered by their parents insurance or purchase an individual policy (mandatory coverage), or offer insurance on an individual basis. The downside of the latter choice is that companies will rarely grant a university the ability to offer insurance packages from competing companies. Luckily, group rates are usually lower, making insurance catered to students at a university more affordable.
SVSU is currently mulling over the offerings of two particular companies: one package by Assurant Health and another by the American College Student Association.
Assurant offers up to $1 million in lifetime coverage ($100,000 per illness/injury). Its plan covers emergency care, surgery, intensive care, office visits, and most outpatient care and ambulance/airlift service. Of course, it also allows for a student to choose his or her own hospitals and doctors. There are many other benefits.
Exclusions include, but are not limited to: pregnancy/childbirth, sterilization, fertility treatment, weight management, dental treatment, routine physical exams, tonsil/adenoid removal, intercollegiate sports injuries, and eyeglasses/eye exams. A comprehensive brochure is available at Health Services in Wickes 267.
The ACSA offers three packages, designed to cater to students with different needs and/or expectations: a "Low Option Plan," a "High Option Plan," and an "International Plan." All three plans require a $100 deductible while each has a different premium paid once per year. The LOP covers $1,500 worth of surgery (both inpatient and outpatient), $900 of room and board (includes physical therapy and intensive care), $200 worth of dental work, and up to $2,000 for injuries suffered from intercollegiate sports competition. The HOP and International plans cover essentially the same categories of illness and injury; however, the HOP covers significantly more of the cost and the International Plan is catered towards international students. The HOP charges a much higher premium than the LOP, at $1,081 a year for students 24 and under, compared with the considerably less expensive LOP, priced at $724 per year for students in that same age group (both plans require substantially greater premiums for older students). Again, students can pick up a comprehensive brochure of ACSA's offerings in the Health Services office.
Benefits and drawbacks of HMOs and PPOs
A Health Maintainance Organization (HMO) operates differently from a tradtional insurer. HMOs generally form networks of care providers via contracts that contain very specific guidelines as to what care is covered under a policy. For example, if you injure yourself in Detroit and your HMO contract specifies that your emergency care will only be fully covered at a hospital (or network of hospitals) in Muskegon, you are left with two choices: either pay for what isn't covered out-of-pocket in Detroit or drive across the state to receive more comprehensive coverage. Generally, HMOs will make up for their inconveniences by charging significantly lower premiums.
A preferred care provider, or PPO, differs from an HMO in that insureds who do not use participating health care providers receieve little or no benefit from their health care plan. A common aspect of PPOs is "utilization review," a process in which representatives of the insurer personally overview the care given in order to ensure that the treatment administered was appropriate for the condition of the patient. The principal benefit of PPOs are essentially the same as an HMO: insureds sacrifice some coverage for lower premiums.