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.
