November 20, 2008

Cuomo Subpoenas C.U. in Health Insurance Inquiry

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This month, the University was issued a subpoena by New York Attorney General Andrew Cuomo as part of a broader investigation of relationships between the colleges and the health insurance companies that cover students.
In addition to Cornell, Columbia, Georgetown, Sarah Lawrence College and several State University of New York campuses received subpoenas and document requests.
According to The New York Times, the investigation is focused on “the adequacy of disclosure of policy terms and costs to students” and also whether colleges receive any “improper payments” in exchange for requiring students to use a particular insurer.
“We are primarily focused on whether insurance companies are paying schools to push students into health coverage they don’t really need and shouldn’t really want,” Benjamin M. Lawsky, special assistant to the attorney general, stated in an e-mail message to The Times.
“We need more time to look at the subpoena,” said Simeon Moss ’73, director of Cornell Press Relations. “We will fulfill our legal obligations.”
Since 1974, Cornell has required its students to have “quality” health insurance, according to the Office of Student Health Insurance website. Cornell’s Student Health Insurance Plan SHIP is managed by The Chickering Group and underwritten by Aetna Life Insurance Company.
In order for students to waive enrollment in the SHIP, they must demonstrate that their insurance plan meets all six of Cornell’s criteria. These criteria require that the student’s insurance plan is provided by a company licensed to do business in the U.S., it provides coverage in the Ithaca area for outpatient and inpatient medical and mental health care, it has a maximum benefit of at least $500,000 per year, it remains in force as long as one remains a registered student at Cornell and it covers pre-existing conditions.
“The terms [of the SHIP] were pretty easy to understand,” said Emma Marshak ‘10.
According to the Office of Student Health Insurance website, over half of all Cornell students enroll in the SHIP.
One such student, Rona Banai ’10, will be enrolling in the SHIP next year because she will turn 23 and no longer be covered by her parent’s health insurance.
“I haven’t really read into [the policy terms] much, but it’s my only option for health insurance.”
Similarly, while admitting that she did not read the terms of the SHIP policy, Sarah Hamshari ’11 said, “Even if I had looked at [the terms of the policy] I would have enrolled anyway because my parents don’t have health insurance in the U.S.”
This subpoena is not the first investigation into college practices conducted by the Attorney General’s office.
In January 2008, the University received a subpoena regarding an investigation into the way study abroad programs are selected and whether “affiliation agreements” drive up prices.
Cuomo’s office has also sent out a series of subpoenas asking colleges for details on their college-branded credit cards and has investigated conflicts of interest in student lending
“With students and their families being financially squeezed at every turn, colleges must ensure that they are looking out for students’ best interest first and foremost as opposed to their own financial bottom line,” Lawsky stated.