March 10, 2008

Some Students Accept Risk, Opt Out of Health Insurance

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With the 2008 presidential campaigns now underway and each of the three top candidates offering universal healthcare solutions, “the uninsured” has become a ubiquitous term in today’s news. But until an anonymous Cornell student revealed to The Sun that he has evaded the school’s mandatory health insurance policy for the past two years, it has never seemed quite so close to home.
The financially-independent student was insured by a family member’s plan before coming to Cornell, but a change in the insurance policy left the student uninsured. When faced with the obligation to purchase coverage through the University’s Student Health Insurance Plan, the student claimed to be covered by an old policy in order to avoid paying the premium.
“I opted out of the school plan because it was very expensive and I’m an independent student and can’t afford to just waste $1400, and I’m pretty healthy,” the student said. “I exercise regularly. I haven’t been really sick, and even when I have been sick, I just work out. I get physicals and stuff, but there [are] free clinics for that.”

This student is not alone. According to Aetna, the company that underwrites Cornell’s Student Health Insurance Plan, as much as 10 percent of the uninsured population is composed of college students, and nearly one third of the uninsured are between ages 18 and 24.
“Most 19 to 22-year-olds are not going to be sick, so the downside of them being uninsured is relatively small,” said Prof. Sean Nicholson, policy analysis and management. “I think it’s a microcosm of what happens in the U.S. as a whole. When you have community rating, you’re charging everybody the same premium. Health insurance is going to seem the least attractive for the people who need it the least … It’s going to be a rip-off for the people who aren’t going to use a lot of healthcare, who are going to be the young and healthy.”
In his course on U.S. Healthcare Systems, Nicholson explained that health insurance was originally created to protect risk-averse people in case of low-probability, exceedingly expensive events.
“Looking back, a lot of uninsured people are happy that they were uninsured, but there’s always going to be a handful of people who are very unhappy that they are uninsured,” he said. “The problem is predicting that ahead of time… that’s the value of insurance — you don’t have to worry about it ahead of time.”
But for this student, making ends meet is the greater concern.
“My honest opinion is that I can understand why health insurance is mandated. It’s so important that everyone has health insurance — I agree with that,” the uninsured student said. “But something’s gotta give — it’s either gotta be free health insurance or cutting back on the little expenses that people have to pay to stay healthy in the first place, like a gym membership, and laundry. If they cut back on those things, we can provide for more important things like meal plans and health insurance.”
The Student Health Insurance Plan (SHIP), managed by The Chickering Group, is designed to be “as affordable as possible for the most comprehensive plan,” according to Jo Ann Molnar-Kieffer, administrator for the Office of Student Health Insurance. The $1,434 annual premium provides coverage related to accidents, prescriptions drugs, routine doctor visits, and emergency room visits, which Molnar-Kieffer cited as the services most utilized by college-age students.
All undergraduates and professional students are automatically enrolled in SHIP and are given the opportunity to waive the plan if they have other insurance that provides coverage in the Ithaca area.
SHIP was made mandatory for graduate students four years ago, and the graduate school instituted health insurance as a paid benefit provided by each department for all graduate students with funding from or through Cornell.
Currently, one-third of the undergraduate population is enrolled in SHIP, as well as 90% of professional students and 100% of graduate students, totaling 10,000 beneficiaries and an additional 500 family members.
Cornell offers health insurance coverage as part of some financial aid packages, but the anonymous source said that by claiming to be covered under another policy, he was able to use the money that Cornell would have put towards his health insurance towards other living expenses.
“Miscellaneous expenses here are off the charts. Just to have a regular lunch costs $8. You’re really paying a lot on a regular basis. [Without paying the health insurance premium], I am able to get more food, and stuff like that. It’s okay to be insured in case I’m sick or in case I’m hurt, but it’s much better to be able to have something to eat so I don’t get sick or have malnutrition or anything like that… It’s a different situation for me than for another student who’s dependent. I have to take care of myself almost any way I can.”
The student could not confirm any statistics, but claimed to know of others who had similarly evaded the expense.
The Board of Trustees made quality health insurance a requirement for all students in 1974. The decision was made because the University saw access to healthcare as a major factor in maintaining a healthy student population. Additionally, the decision was compelled by the University’s obligation to support local providers.
“When you bring students into the area as an institution, and they’re not insured, you then bring in a town-gown issue where you have providers in the community who are serving a population that has no way to pay their bills,” Molnar-Kieffer said.
Cornell is not alone in requiring health insurance of its students. Molnar-Kieffer said that there is a trend in higher education towards requiring quality health insurance upon enrollment.
At Cornell, the role of The Office of Student Health Insurance is to educate students, not to reprimand them. Even random waiver audits are seen as an educational tool.
“We do a considerable random audit check. We also spot check for insurances that have historically not met the University’s requirements… It’s a good tool for us to communicate back and forth with the students about their insurance and making sure that they’re adequately covered.”
But the reality is that regardless of how much knowledge a student has, they will only purchase health insurance if they have the money to pay for it.
“The reason why universal [health coverage] is such an issue in this political campaign is because people can’t be afford to be healthy in the United states, and Cornell is just a microcosm of what’s happening nationally,” the anonymous student said. “That’s why it’s such a hot-button issue. It’s a human rights issue — everyone should have the right to be healthy, but some people can afford it, and some people can’t. For the average Cornell student who is managing their own finances, it’s just that.”