Health insurance comes up short

Andrew Sheeler
Feb. 22, 2011

Health insurance has dominated the national dialogue for years now. It was a major factor in the 2008 presidential election. In both 2009 and 2010, the health reform battle drew constant national headlines. The debate goes on and the future of health reform is unclear. Here’s what is clear about the health insurance situation now for students in Alaska.

A health mandate

The Board of Regents gives each university chancellor the authority to require students to have health insurance. And each chancellor in the UA system has chosen to make health insurance compulsory.  Students at the three major campuses are required to be insured through UnitedHealthcare unless they can demonstrate proof that they are covered elsewhere, such as through their parents or employer.

For Margaret Kellogg, insurance coordinator for the Center for Health and Counseling at UAF, the challenge is getting students to understand what their insurance does, and more important, what it doesn’t do. The student insurance plan is classified as supplemental, meaning the amount of coverage it provides is limited. This means that even though students with no other coverage are required to purchase the plan, it is not considered full insurance. The university doesn’t offer full insurance in order to keep the cost of the insurance affordable, according to Kellogg.

The website for the health center says that the insurance is “not recommended for persons with chronic illnesses.” It doesn’t cover expensive medications for people with heart conditions, diabetes, epilepsy or other problems. It doesn’t cover preventative medicine, dental check-ups or eye exams. It is designed to cover major medical problems, Kellogg said, such as an emergency room visit. But even there, the student insurance can fall critically short.

Catastrophic coverage, or lack thereof

Take the case of Alison Banks. Banks is a graduate student working on her doctorate in marine biology at UAF. She knew the student insurance plan was limited. For example, the nine-months pregnant Banks knew not to expect much for her routine pregnancy check-ups.

“The one reason I kept it was because of [a possible] emergency,” Banks said. That emergency happened in July of 2010, when Banks was diagnosed with appendicitis. What is normally considered a routine procedure, the surgery to remove Banks’ appendix was complicated by the fact that she was two months pregnant at the time. She spent 24 hours in Fairbanks Memorial Hospital (FMH). The total bill for her stay was $22,367. Her student insurance covered $5,871 of it, far less than Banks expected. “This is what I was paying for, this was an emergency!” Banks said.

According to Banks, the student insurance declined to cover more because her visit had been classified as outpatient care. An outpatient visit is any medical procedure that does not involve an extended hospital stay. Wart removal, hernia repair and vasectomies are all examples of outpatient procedures. While FMH classified Banks’ visit as “surgery with extended stay,” UnitedHealthcare took that to mean outpatient. UnitedHealthcare will pay 80 percent of “usual and customary fees,” the statewide average cost of a procedure, but they limit outpatient procedure coverage to $2,000. Banks was left with the bill for the remaining portion, which wiped out her bank account. Because she had no savings, Banks went on the state’s Denali KidCare program to pay for her pregnancy expenses. Denali KidCare is an offshoot of the state’s Medicaid program, designed to cover low-income pregnant women and children. In the meantime, Banks is challenging the insurance company’s claim and filing a grievance with the state. Banks believes that UnitedHealthcare is an expert at gaming the system to their benefit. “These insurance companies really know what they’re doing,” she said.

The Health Center’s Margaret Kellogg said there were many “heart-breaker” stories of students finding out only too late the limits of their insurance coverage. It frustrates Kellogg when UnitedHealthcare tries to dictate what is medically necessary and what is not, or when they refuse to pay for a brand name drug that may be more effective than a generic equivalent. With students, Kellogg said perhaps the greatest challenge is explaining what happens if there is a break in coverage.

If a student’s coverage ends, UnitedHealthcare considers their health history to that point a pre-existing condition, something they refuse to pay for. This means that students who purchase their insurance by the semester, a much cheaper alternative to the annual insurance, are much more likely to have their conditions diagnosed as pre-existing and therefore denied. It’s not an easy choice. Annual coverage for the 2010/2011 academic year cost $1,073. Coverage for the spring semester costs $389; summer coverage costs $273.

A pre-existing technicality

When Heather Bryant, a senior journalism student and editor at the Sun Star, went on winter break, she thought she had her insurance coverage in place. Just before the new year, Bryant checked in to the emergency room of FMH thinking her appendix had ruptured. Instead, she underwent emergency surgery to remove a cyst and spent four days in the hospital. The total cost of her stay hasn’t been determined, but it currently stands at more than $20,000. In early January, she received a letter from UnitedHealthcare saying they were investigating her claim to determine if it was pre-existing. If her claim is classified as pre-existing, she will be responsible for almost all of her hospital stay. “That’s a lot of money to be paying for someone who’s still a student,” Bryant said. She has another cyst that may need to be removed, an expensive proposition if UnitedHealthcare doesn’t want to pick up the tab. “I really don’t want to be paying medical bills while I’m still paying student loans,” Bryant said.

No way out

For students who do purchase the yearlong insurance plan, which Kellogg recommends, there are still potential pitfalls. Graduate student Andy Baltensperger studies wildlife biology at UAF in pursuit of a doctorate. At the beginning of the school year, he purchased the annual health plan. When he learned that a research assistantship would pay for the more comprehensive graduate student insurance, he attempted to cancel the remainder of his student insurance and receive a refund. The business office told him that the money had already been paid to UnitedHealthcare. There would be no refund. Balternsperger eventually cancelled his graduate insurance and took the lesser coverage.

“At least I’ll know not to buy insurance next year,” Baltensperger said. He believes the university isn’t doing enough to hold UnitedHealthcare accountable. “If you can’t tell the insurance company to let students get out of their policy, you got a bum deal.”

Margaret Kellogg said students “need to do their homework” on their insurance policy. They need to know, for example, that the university no longer automatically adds health insurance to a student’s bill. The university considers it more cost effective to place responsibility for signing up for insurance on the students. “They owe it to themselves to make sure they’re paying for what they think they’re paying for,” Kellogg said.

What student insurance IS good for

Despite numerous complaints from students about where the health insurance falls short, Kellogg said that overall she likes UnitedHealthcare. She said the ability to get somebody knowledgeable on the phone when needed was a driving factor in the selection of UnitedHealthcare. “We’ve had a very good relationship with this insurance company over the years,” Kellogg said. The university has kept the annual insurance coverage around $1,000 or less for 15 years now, no small feat Kellogg said. Then there are the perks: birth control and all visits to the health center are covered 100 percent by student insurance. Kellogg cited the birth control coverage as a major coup when it was added roughly a decade ago.

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