Trading insurance for an education

Texas university students grapple with rising health care costs

By: Kristin Leveille

Posted: 7/5/07

Luis Botello, a senior communication major, is looking forward to graduating from Texas A&M in August. When he is not busy with school he performs with a local rock band called "The Restless," and sings for Aggieland Mariachi. He participates in activities many college students enjoy and anticipates a job with a marketing firm after college.

Beyond worrying about the usual tests or grades, one thing Botello says he constantly has to think about is his health.

"I worry about getting sick," Botello said. "I always think about the people next to me and whether or not they are sick."

Botello is one of millions of Texans who lack health insurance.

More people are uninsured in Texas than any other state in the nation, and the group that is most likely to be without health insurance is young people age 18 to 24.

Comparing all states using three-year-average uninsured rates for 2003-2005, the U.S. Census Bureau found that 24.6 percent of Texans were uninsured. The number was 8.9 percent above the national average.

According to a 2002 report from the Texas Department of Insurance (TDI), among Texans age 18 to 24, 42.5 percent lack health insurance. And in 2006, according to the Centers for Disease Control and Prevention, 43.6 percent of Texans age 18 to 24 had no health care coverage at all.

Botello, who is paying for college through loans, says his parents aren't with a company that provides health care benefits, and that health insurance is simply too expensive for him to pay for on his own.

"With the expense of classes it is too much for me to take out more loans," Botello said.

Although the TDI found that young adults who attend college are more likely to have insurance, students in this age group are still more at risk of being uninsured when compared to the total population.

Why are such a high number of college-aged students uninsured?

Many are barred from their parents' plan if they don't attend college; some pass the age limit to claim dependency and others just don't think they need it.

David Koren, vice president of a national health insurance program, said 23 is usually the cutoff age for students to claim dependency and 19 for non-students.

"[Young individuals] tend to be employed in a disproportionate amount of companies that do not offer health insurance, since it is not as much of a concern to them," Koren said.

Delia Presley is the vice president of marketing and communications for the Texas Health Institute, a nonpartisan health care research organization. Presley said that there are many reasons why young people are uninsured and one of those reasons is because they think they are bulletproof.

"Young people would rather elect to spend money on something tangible," Presley said. "They could spend it on insurance premiums or a new car, and for those who have never had health problems, a good portion, will go with the tangible."

For a private insurance company in Texas, it would be less costly to cover a young, healthy adult, Presley said, but that doesn't mean the comprehensive cost for health insurance is down across the board.

In college, students face the challenge of financing school, balancing classes and other activities, in addition to work. And although insurance premiums for Texans age 18 to 24 are generally lower than other age groups, many young adults simply don't make enough money or don't purchase insurance.

A national health insurance program's Texas PPO 500 plan offers a $500 deductible for college-aged students in College Station for $261 a month, but these numbers will change based on each individual's medical history and age.

"Premiums for young adults, in states that allow medical underwriting and age rating, like Texas, are always much less expensive than rates for the rest of the population," Koren said. "Health insurance premiums are a reflection of medical costs, as medical costs go up, so do health insurance premiums, by the same percentage."

A 2005 TDI survey of student health insurance plans found 71 percent of uninsured students said they lacked coverage because it was too expensive.

"Income is lower at that age [18 to 24] and many don't have the money to pay for coverage like someone in their 30 s, someone who has been in the workforce longer." Presley said.

Robin Collett, a senior biomedical science major, tore her ACL last semester when she was snow skiing. She said the bill was mailed to her instead of her parents.

"It was shocking to see the discrepancy between the doctor's bill and what the insurance adjusted for," Collett said. "If I wasn't covered by insurance it would have been double the amount I had to pay."

Collett works at a medical billing company and said she has thought about health insurance because she will no longer be covered by her parents' plan when she turns 25.

"I don't think health insurance is what most students think about unless they had to go through something major," Collett said. "At work I see most students are still listed under their parents' insurance."

Student Health Insurance Plans

In Texas, 63 percent of colleges have student health insurance plans, which are offered through commercial carriers that have contracts with universities. Few colleges in Texas require students to have insurance coverage, with 12 percent of colleges requiring it, 61 percent requiring certain students to have coverage, and 27 percent having no requirements, according to the 2005 TDI survey.

A&M does not require U.S. residents to have health insurance, but does make it mandatory for all international students.

For students not covered under an employment-based plan or a parent's plan, A&M, through Associated Insurance Plans, offers a Student Health Policy and Graduate Student Policy.

Courtney Waggoner, a patient services clinical coding specialist for A&M Student Health Services, said deductibles range from $250 to $100 based on which plan a student chooses.

A deductible is an amount that must be paid out of pocket before a plan begins to pay. Usually, the higher the deductible, the lower the premium.

"All students can use the health care center, and once they get a copy of the receipt they can send it into their insurance," Waggoner said. "Students pay a reduced fee at the health center compared to what others charge in the community."

Waggoner said A&M does not track the number of uninsured students because they do not file insurance at A.P. Beutel Health Center, but she said it is important for students to get health insurance.

"I hope students never have to use it, but they need it to avoid a catastrophe that could hinder them from going to college," Waggoner said.

A&M Coverage

In Texas, the average cost for coverage in a student health insurance plan ranges from $718 to $786, according to TDI.

For the A&M 50K plan students pay a $250 deductible for in-network and $500 for out-of-network treatment.

Students get up to $750 for prescription drug reimbursement.

Students receive up to $50,000 in coverage per accident and pay $132 monthly - $1,305 for a year of coverage.

The plan does not cover accidents occurring from more risky actions such as parasailing or skydiving, and injuries incurred while intoxicated or under the influence of drugs, unless doctor prescribed.

Student must maintain a six-hour credit requirement in order to be eligible, and upon graduation a student can extend insurance for one year.

Botello said he has a medical issue which requires attention as soon as possible. He said he will be forced to seek medical treatment close to his home in Los Fresnos, Texas, because the cost will be substantially less.

"I feel like I am risking my health for my education," Botello said. "I have learned a lot at A&M about living and surviving, while getting a great education."

Botello said he will miss his friends and his singing performances, but that he is ready to get a job that will provide him with the health coverage he has gone without.