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The Undergraduate Health Insurance Plan

Across the United States, many universities mandate some form of undergraduate health insurance, usually aggressively marketing their own forms of insurance. Many university automatically enroll students in top-quality, “premium” or platinum-level health insurance and add several thousand dollars to the tuition bill. While some schools accept waivers (in the case that a student already has adequate health insurance) or provide alternatives for students on Medicaid, traversing these waters is often fraught with uncertainty, stress and, most times, rejection. In the end, many students have several thousands of dollars worth of extra money billed to their tuition while largely underutilizing health care options at school.

Rutgers University released a statement in 2013 after the State of New Jersey repealed legislation that required universities to provide health insurance and replaced it with a law requiring students to purchase forms of health insurance. Rutgers University outlined the following reasons to allow compulsory purchase of health care:

  • Uninsured students consume greater time and resources at health centers
  • Unexpected health care costs are a reason for students to drop out
  • Local health care providers require prepayment for uninsured students, limiting access
  • Rutgers claims its deals are better than the “voluntary market”

It makes sense and intentions seem good when universities try to mandate some form of health insurance, and the idea is largely backed by many lawmakers and policy makers. Young adults leaving the confines of home for the first time (and, in the pre-Obamacare era, leaving the family health care plan sometime soon) need some sort of health insurance plan so they won’t pay thousands of dollars just for a night at the hospital. However, it may seem that universities have essentially gamed the system to rip off students for more of their money. Since the passage of Obamacare, students can remain in their family insurance plans until the age of 26. Yet universities still aggressively enroll students in their own university plan, adding thousands of dollars of financial burden to either the student or parent. For example, Rutgers’ health insurance is just over $2000 for the school year. At Cornell University, the cost rises to nearly $3000, and at Stanford, their Cardinal Care program charges a premium of $4900. The redundancy of these plans are incredibly frustrating to first-time students who don’t understand the health care system and parents who don’t wish to waste money on health insurance plans they may not realize are unnecessary.

Waivers are declined frequently because of what I began to perceive as a hospital monopoly effect. Especially in smaller college towns in rural or suburban areas, the entire campus and surrounding town is serviced by only one hospital. When submitting a waiver, the university needs to ensure that the student’s alternative health care plan is accepted at said hospital. Often times, it is not; health care insurers are often regional and only accepted in a network of hospitals close to home. A student from California going to school in New York will probably find no hospitals accepting his insurance. Employer-mandated healthcare make it difficult for the entire family to switch healthcare insurers just for one of the kids in the household, and many people end up paying the few thousand bucks instead. To accommodate for students in this situation, where they have no option but to buy college mandated insurance, colleges should be providing more affordable health insurance options, rather than charging exorbitantly high prices.

Waivers are also rejected if a university deems a health insurance plan to not be “adequate.” For example, Cornell University lists over seven requirements to be considered an adequate alternative — on par with an expensive, platinum-level insurance policy. For many students looking to get a waiver, they themselves need to already have an excruciatingly expensive private health insurance policy.

Medicaid students are sometimes hit the worst. Medicaid policies differ from state-to-state, so if the student’s state of residence changes, they may be disqualified from receiving a Medicaid-based health care plan from their university, even if they technically offer assistance. Even if they are eligible, affordable insurance is hard to find, requiring a separate application which could be rejected, and that’s assuming the university has a Medicaid plan in place, as some but not all universities provide a Medicaid plan.

Universities have been profiting off students due to the capitalistic and flawed nature of our health care system. Regional hospital networks prevent students from utilizing their insurance elsewhere. With nowhere else to turn, they are forced to pay high premiums for the university plan. Waivers are rejected for obscure bureaucratic reasons as “not adequate” or because their insurance is not accepted by the only hospital within a 100 mile radius.

Surely there is a better way to provide health insurance policies to students without it being a financial burden. Costing between $1000 to $5000 dollars a year, health insurance can easily add up to $20,000 over four years, often times in loans. While some can qualify for Medicaid, and some can easily pay the extra few thousand dollars, most students find themselves stuck in the middle. Many students receive some form of financial aid, but find themselves in more financial trouble after paying for their health insurance, which isn’t covered by their financial aid. They are forced to take out more loans, as health insurance is a requirement for attendance. There has to be a better way for students to receive the health care they need without the debt they don’t.

Jeffrey Ho (1 Posts)

Pre-Medical Guest Writer

Cornell University

Jeffrey Ho is an undergraduate student at Cornell University's College of Human Ecology. He hopes to become an infectious disease physician and work in the public health field, and is currently interested in a wide range of health topics ranging from medical research to healthcare policy. In his free time he enjoys competitive swimming and playing water polo.