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Health Insurance Coverage of College Students Examined by GAO

April 16, 2008

As many as 1.7 million college students lack health insurance coverage, according to a recent report prepared by the Government Accountability Office. Certain groups of students, including those who attend part-time, are older, are members of racial or ethnic minority groups, or whose families are low-income, are more likely to not have coverage. Although most students’ coverage is obtained through employer-sponsored plans, the report acknowledges the efforts of colleges and universities to provide student health insurance plans.

GAO estimates that 57 percent of colleges and universities offer some type of health insurance plan for students, with four-year institutions most likely to do so (82 percent of publics and 71 percent of independents). Only 29 percent of community colleges offer student health insurance.

College Plans Vary Widely

College plans are diverse, with varying mixes of benefits, limits, and costs. Annual premiums at colleges included in the study ranged from $30 to $2,400, with an average of $850. Unlike employer-sponsored plans, which are typically subsidized, students pay the full premium for these plans, so administrators attempt to strike a balance between costs and benefits. Many plans are customized to coordinate with services offered by student health services.

Many of the plans limit or exclude coverage for certain services and almost all (96 percent) established a maximum benefit amount, usually on a per condition per lifetime basis. The maximum was set at less than $30,000 for 53 percent of those plans, while only 12 percent had maximums higher than $50,000.

One way to lower the costs of group health insurance is to enroll more, and healthier, participants. GAO estimated that about 30 percent of colleges and universities require full-time students to have health insurance. Four-year private colleges are most likely to do so (62 percent). Insurance industry officials told GAO that institutions which mandated health insurance coverage typically signed up 15 to 40 percent of their students, compared to less than 10 percent at those which didn’t.