Buyer Beware

As international students at Cornell University prepared to start the school year, they received an e-mail warning them of companies using Cornell’s name to market health insurance plans that are not endorsed by the university. In many cases these plans – sold by Internet-based companies that cater to international students – provide coverage that is not comprehensive in nature and falls short of the university’s criteria for what counts as adequate health insurance.

“We have had several incidents where students thought they purchased the plan offered by Cornell, because the marketing indicated it was a plan ‘for Cornell students,’ ” Craig R. McAllister, the director of risk management and insurance for the university, said in an e-mail interview. “In cases where the plan did not meet university requirements, there was understandable confusion when the ‘Plan for Cornell Students’ didn’t result in an approved waiver [of the requirement that students enroll in the Cornell student health insurance plan].” Like many institutions, Cornell has a “hard waiver” requirement in which students are automatically enrolled in the university-sponsored health plan unless they can prove that they have an alternative plan that meets the university’s minimum criteria. 

Cornell is not the only place where this issue has come up. “I think we have all seen on our respective campuses international students who have been surprised in an unpleasant way when they seek medical care and they find out they owe sums of money that they didn’t expect to have to pay or that the insurance is not covering them at all or it is covering them at a very low percentage of the cost,” said Anita L. Barkin, director of Carnegie Mellon University Health Services and a past president of the American College Health Association.

She pointed out that in choosing between insurance plans international students have to learn a whole new language with words and phrases like “copays” and “deductibles” and “preexisting conditions” and “exclusions” and “out-of-pocket maximums” – a language that can be difficult for American students to interpret, let alone international students, some of whom are coming from countries with socialized health care systems or where the costs of many medical procedures are fractions of what they are in the United States. While a subset of international students come for short, summerlong stints, on the other extreme international graduate students may be coming for five or more years -- and often with families -- increasing the odds of a serious incident occurring.

 “We're concerned that students will look at the bottom line by looking at cost rather than cost-benefit,” Barkin said.               

Some of the plans available for international students to purchase online are strikingly cheap. If you’re between the ages of 12 and 24 you can purchase the COMPASS Silver plan from ISO – Student Health Insurance for $31 a month. With a maximum per-injury or sickness benefit of $150,000 and medical evacuation and repatriation of remains benefits of $60,000 and $50,000 each, the plan is advertised, truthfully, as exceeding the U.S. State Department’s minimum insurance requirements for J visa holders. 

However, read the plan brochure and you’ll find myriad exclusions and benefit caps. The plan only covers treatment for the first 13 weeks after onset of a given injury or sickness. Childbirth is only covered if conception occurs after the term of coverage begins. There is no coverage for preexisting conditions or for routine care, for injuries sustained from participation in “amateur, club, intramural, interscholastic, intercollegiate, professional or semi-professional sports,” nor from injuries resulting from the use of alcohol or drugs, except when prescribed by a physician. There is no coverage for suicide or attempted suicide or intentionally self-inflicted injuries (that last exclusion may vary by state). If you need surgery, the maximum benefit is $3,000. If you need chemotherapy or radiation treatment, the maximum benefit is $1,000. (Keren Ziv, ISO’s CEO, declined to be interviewed for this article.)

Brooke H.M. Stokdyk, an assistant director of Michigan State University’s Office for International Students and Scholars, is also CEO of IE Student Health, a company she founded in 2012 in order to advise student services professionals on how to help international students navigate health care issues. The private market for international student insurance is something of a mixed bag, she said, in that on the one hand companies can offer lower premiums simply because international students have lower health care usage rates. “But the more I looked into the private market the more I discovered how rife it is with deception and unethical business practices,” she said. “They’re not doing something illegal but they’re really doing something awful."

“What they’re doing is they’re preying on the fact that international students don’t know what the cost is of medical care is in the United States,” she said, noting for example, that "international students have no hope of knowing there’s no surgery you can get for $3,000." When international students rack up unexpected bills they’re unable to pay for, they often return home, she said – forfeiting their chance to complete their degree program and leaving the local hospital to eat the unreimbursed costs of their care. 

In fairness, not all colleges offer health insurance plans of their own – and some have historically offered pretty flimsy coverage. A number of universities have dropped their plans because it would be impractical to increase the level of benefits to a point that they would conform with the minimum coverage levels set by the Affordable Care Act. The healthcare reform law will raise the overall level of coverage provided by individual plans sold on the private market, but crucially, as far as international student health insurance goes, short-term limited duration plans – of which the ISO’s COMPASS Silver is one of them – won’t be subject to those requirements.

Some insurance companies that cater to the international student market are creating ACA-compliant plans, but they exist alongside the lower-benefit plans, Stokdyk said. The same company might offer a comprehensive plan at one price point and another, lower-priced plan that, say, excludes coverage for cancer. “My primary concern is getting schools to build quality boundaries to help students who are ill-equipped to make decisions in this market – which is basically all of them,” she said. Starting next year, Stokdyk said that Michigan State plans to prescreen a few private insurance plans and promote them to international students as the only acceptable alternatives to enrolling in the university plan.

PSI is another example of a company that specializes in health insurance plans for students and scholars in the U.S. on non-immigrant visas: you can’t purchase its plans if you’re a U.S. citizen. It advertises its gold, platinum and diamond plans as being ACA-compliant. Its silver plan has a $5,000 maximum for surgery for each injury or sickness with the caveat that “if two or more procedures are performed through the same incision or in immediate succession at the same operative session, the maximum amount paid will not exceed 50 percent of the second procedure and 50 percent of all subsequent procedures.” Among the exclusions are coverage for assistant surgeon fees and coverage for chemotherapy and radiation.

 “Their [international students’] health insurance needs are not the same as American students’,” said Chris Wacker, a regional accounts manager for PSI. “If they get cancer they’re going to want to go back to their home country. They’re not going to want to be here for that. They’re generally here for two, three, maybe four years, and they don’t have the same health care needs.”

As is a common practice with companies that market insurance plans directly to international students, PSI prominently features university names on its website. If you select Carnegie Mellon, for example, you’ll get a list of three “recommended plans according to your school's requirement.” It also includes the caveat “Check with your school before buying PSI coverage” and there is a link to the official Carnegie Mellon student health insurance policy. If you follow that link, you’ll learn that Carnegie Mellon only accepts employer- or government-sponsored plans as alternatives to the university’s plan. Plans purchased on the private market will not meet the university’s hard waiver requirements.

“We will have to update the portal for that school,” Wacker said, when told of Carnegie Mellon’s requirements by Inside Higher Ed last Wednesday. (Correction: an earlier version of the story said that the portal had not since been updated. Wacker said that the portal for Carnegie Mellon has in fact been updated with the caveat that students should check with their institution before buying the plan; however, it continues to list three PSI plans as being recommended according to Carnegie Mellon's requirements.) "We’re kind of a demand-driven company. Unless people come to us and say we don’t accept any of these plans, then we just don’t have dozens of agents who are checking the portal for each of these schools. It’s hard to keep everything updated all the time,” he said. He added that sometimes universities run specialized or short-term programs -- outliers, of sorts -- in which participants wouldn’t be eligible for the university insurance plan: “schools can actually need a company like us.”

Asked why the company uses university names in cases in which PSI doesn’t have a relationship with that institution, Wacker made the comparison to “a deli across the street from a main gate of a university that says ‘XYZ university specials; come and get this special sandwich.' I don’t see the big difference…. I see it as just helpful information.”

Wacker said that PSI is fighting for the right of international students to have options in their choice of insurance plans. “To get the best coverage with every benefit and no exclusions, that’s not necessarily what we’re fighting for.”