The case for requiring Utah students to have health insurance
The term “mandatory insurance” is becoming a regular phrase for many universities in the state of Utah, including Utah State University, and there are many reasons why.
Utah State University is genuinely interested in the well being and success of our students and requiring health insurance would financially protect students and help to retain those who experience unexpected medical problems. A surprising number of students are seen by the insurance coordinator at the Student Health & Wellness Center each semester after being diagnosed with a significant medical condition or that have been involved in an accident and are facing thousands of dollars worth of medical costs and do not have insurance to help cover those costs.
Although students have access to many services at the Student Health & Wellness Center, it may be necessary for them to have an MRI or cat scan to determine a diagnosis and this service cannot be provided at the Student Health & Wellness Center and can cost about $1,000 to $1,500 on average. Students may also need to be referred to an off-campus specialist for further care, which may require multiple visits and can cost a considerable amount of money.
I don’t think students understand that choosing not to carry some form of health insurance can possibly affect them for the rest of their lives and unfortunately, I have far too many examples to prove this.
So, why should universities require that their students carry health insurance? There are multiple reasons. It offers some protection for the student’s financial investment in a college education by protecting them in case of an unexpected situation and allowing them to continue with their schooling even in the event of needing medical treatment.
It contributes to education in that it promotes personal responsibility, as many uninsured individuals assume that if necessary, they will receive care and “someone” will pay for it. It serves the interests of students by improving access to health care which may be necessary for treatment outside of the Student Health & Wellness Center. It reduces premium prices for the student health insurance plan making it more affordable to students who choose to purchase the student plan. It also serves the interest of the institution to reduce liability.
The voluntary health insurance plan at USU offered to the students at this time is currently in a death spiral and falling fast. Since 2002 USU has seen continual rate increases while the number of students enrolled with the plan has decreased from an average of 1576 students to 349.
Rate increases can be attributed to adverse selection in our plan, which means that the majority of students who do purchase the health insurance tend to have chronic health problems and therefore make high utilization of the plan. Insurance plans are meant to share risk, but they must be financially stable themselves in order to stay in business. A break-even plan would use about 77 cents to pay claims and 23 cents for administrative costs. Currently, in the voluntary student health plan, for every $1 put into the plan, $1.06 is paid in claims (not including administrative costs), and has been as high as $1.21 paid in claims over the past five years. Increasing premiums, decreasing enrollment, high utilization and having a voluntary plan has created a lack of insurance companies willing to contract with Utah State University.
During the past five years, USU has sent proposals out to approximately 18 insurance companies with only three (including the current carrier) responding with a bid. Other companies respond simply by stating that, unless our institution implements a mandatory insurance requirement, their company is not interested in providing a health insurance plan for USU students.
The only option that will improve this situation and allow USU to retain a student health insurance plan for students would be to adopt a mandatory insurance requirement for all students in order to attend Utah State University, necessitating that all students show proof of insurance before enrollment. Many states, including Idaho, California and Massachusetts, have implemented a mandatory insurance requirement for all State higher education institutions and it has proven successful.
Implementing a mandatory insurance requirement at USU would allow our institution to offer insurance plans at lower rates and because both the student and the institution are making a large commitment to the student’s education, this would allow Utah State to make sure that there is a provision for our students to get necessary medical care in order to stay healthy and to stay in school. Utah State University isn’t trying to get students to buy the university health care plan, only to have insurance.
Utah State University cares about our student’s opinions and would like to invite all students to join an open forum held by the Student Health Advisory Committee (SHAC) on Wednesday, November 14th at 9 a.m. on the west side of the international lounge in the Taggart Student Center to discuss the issue of mandatory insurance.
Noell Hansen is an insurance specialist at the Student Health and Wellness Center.