So what is important to know when you choose your Student health insurance plan?
- Colleges and Universities sometimes recommend health insurance plans which are the best for them financially but not always for students (sometimes you get much a better deal for the same premium on your own)
- Be careful with low maximums as rare diseases or heavy accidents may be very expensive (less than $ 100.000 is a bad deal)
- Pay attention to the caps on coverage for particular bills (ex.: $2000 per day cap for room, board etc.)
- Look at the percentage premiums returned to customers vs. Profits and administrative costs. Anything below 75% returned is a bad deal.
- Make sure that major illnesses as cancer or appendicitis are covered
- Sometimes it is better to choose plans with higher deductibles, but covering much more
Business Week says that some Insurance plans only had benefits ratios of 42.6 % (in spring 2008), in previous semesters, benefits ratios were as low as 10.2 % – making student health insurance a gold mine for Insurance companies and a bad deal for students.
The “bad examples” mentioned by Business Week:
- Even with “major medical” coverage only 10 % of the bills are reimbursed
- Maximum limits of only $30.000 or even $10.000 are unrealistically low
- Private school or colleges forcing their students to bad deals
- A Bone fracture creating a bill of $24.000 in 48 hours – but due to a $2.500 per day-cap, the insurance paid only a small part of it
That is why you have to be careful when you choose your health insurance plan. If ignore these facts, or if you don’t read the health care plan closely you can find yourself with huge debts in order to pay all the hospital and doctor bills. So please read the details of your health insurances closely and inform your friends and families about the risks.