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Given tightened state budgets stemming from a deteriorating economy, public colleges and universities face unprecedented financial challenges. The phrases “hiring freeze” and “no spending increases” are dominating headlines of campus newspapers (and this Web site). On the consumer side, declining 401(k) and 529 college savings plans are contributing to greater financial demands on students and their families.
Will colleges and universities continue to push this economic burden to families at this difficult time, in the form of higher tuition, room and board, and various fees? Or will the institutions find alternative solutions?
Here at the Center for Student Health and Life, our concerns relate specifically to how this new, harsh reality affects student health and wellness on campus. Exacerbating the problem, health care costs generally have been increasing about 10 percent a year since 2000.
Despite these realities, we believe that every college student deserves access to high quality health and wellness services. Given rising costs, more creative solutions must be found to improve the quality of health care. While reducing the financial burdens placed on students and their families may not be in the realm of the possible, rising costs must end.
Unfortunately, many schools are increasing the fees that all students are required to contribute toward a student health center (which further increases financial aid demands). For example, the health fee at North Carolina State University is now slated to increase to $247 from $196 three short years ago. At the University of Maryland at College Park, budget cuts have translated into a hiring freeze, causing a position for a staff psychologist to become vacant in January. The University of Nevada at Las Vegas student newspaper recently printed an article titled “Hiring Freeze Hurts Health Center.”
But hiring freezes and/or fee increases at student health centers can be averted at many medium and large-sized schools by dealing with some cultural obstacles and following the lead of some of their peer schools.
There are several approaches that could work for many schools, including:
- Making it easier for a family’s health plan to be accepted at student health centers; and
- Negotiating more effectively with private insurance companies for those who are not covered under their family plans.
According to a recent Government Accountability Office study, 80 percent of college students have health insurance, with two-thirds of college students covered under a parent’s employer sponsored plan. More good news is that recently passed legislation which has now been signed into law ensures that a student’s family coverage continues even if the student takes a break from their studies due to illness (a tragic loophole that has now been fixed). And many states are increasing the age under which a child can remain on their parent’s plan, including New Jersey, which raised the age limit to 30.
But the reality is that only about 25 percent of the “out of network” costs are reimbursed when the health center is not “in network,” according to The History and Practice of College Health, by H. Spencer Turner and Janet L. Hurley (University Press of Kentucky, 2002).
Most parents with whom we’ve talked are surprised that most schools do not make it easy to use a family’s current health insurance coverage. And most students are pretty oblivious as well: in our survey earlier this year, most students did not know whether their health center accepted their family plan or not. To be sure, going “in network” does not necessarily work for all schools, particularly smaller schools with limited facilities for whom the administrative costs would be too high.
The reasons many medium- and large-schools do not make it easy to use family coverage involves historical and cultural obstacles to health centers doing coding, “credentialing” (also necessary to become “in network”) and the paperwork and additional administrative costs involved with filing insurance claims. On one hand, who can blame them? Who wants to deal with insurance companies when many of us rightly or wrongly feel that their goal in life is to “delay, deny and frustrate?” Many doctors and nurses are attracted to college health centers because they can avoid some of these “headaches” and focus exclusively on providing care.
However, budgets are too tight to allow the cultural barriers to continue to stand. Accepting a family's current health insurance policy can eliminate the need for fee increases and prevent staffing cuts. Ohio University and the University of South Florida are two recent examples of schools that recently moved to insurance billing to address financial challenges, keeping administrative costs down along the way.
Ohio University had been facing a $400,000 shortfall for its health center. Inside Higher Ed covered Ohio University’s change to become “in network” providers and accept family insurance policies to deal with its budget crunch. Inside Higher Ed states that "[w]ith the revenue [Ohio University] hopes to tap into, the university is considering a renovation and addition to its health facility, and is expanding its services this fall." The school plans to hire additional psychologists with the added resources, and increase evening and weekend hours.
The University of South Florida now accepts multiple insurance providers, and “this means that going to the clinic will be cheaper for students,” according to The Oracle, the college paper. To reduce administrative costs associated with processing claims, USF teamed up with its medical center, USF Health. Ohio University contracted with a third party billing company to minimize up-front expenditures and administrative costs associated with accepting a student’s family insurance.
Colleges must also do a better job of negotiating insurance policies for the one-third of students who are not covered under their family plan.
Under many insurance plans offered by schools, there’s a lot of fine-print. Just because the school has endorsed a plan on some level, doesn’t mean it has the “Good Housekeeping” seal of approval. Prescription drug coverage is often minimal; there are many exclusions, out-of-pocket maximums are generally high, and benefit ceilings are low. Lab work often has higher costs where the health center is paid for largely by student fees. Schools and students can and should expect more for their coverage, and colleges need to use their purchasing power to negotiate better deals.
The financial challenges facing public colleges and universities have been accentuated during this recent market meltdown. And while every college student deserves access to high quality health and wellness services at their school, these students should not bear such a heavy financial responsibility. Given the rising costs, more creative solutions -- like accepting a family’s current health insurance policy -- must be explored to protect the quality of care while keeping a lid on the rising fees. With schools like Ohio University and the University of South Florida proving the success of this approach, the bar has been set for others to follow.
