College-sponsored health insurance plans charge excessive premiums, provide low coverage limits and impose inappropriate exclusions, according to an investigation revealed today by the New York Attorney General's office.
In fact, some of the exclusions are inconsistent with federal consumer protections contained in the recently enacted healthcare reform law, state Attorney General Andrew Cuomo says.
At the same time he disclosed the probe's findings, state Attorney General Andrew Cuomo announced that he has subpoenaed the records of the 10 largest insurers of students in the nation as well as those of five large brokers, agents and consultants.
He says that was done because the investigation found "troubling and conflicted relationships" between agents and health insurers.
These involved undisclosed contracts that created incentives for the agents to work against the best interests of students and to persuade schools to take and maintain overly costly plans, Cuomo says.
He says the investigation also found that, in addition to providing limited coverage, many school-sponsored plans are unnecessarily costly.
"In many cases, the amount of claims paid out by the insurance company is only a fraction of the premiums students pay, resulting in excessive profits for the insurance companies," Cuomo says.
Cuomo also says he has sent a letter to more than to more than 300 colleges, universities, professional schools, and trade schools.
In the letter, Cuomo writes he advised them to review their sponsored student health insurance plans and alter potential problems that add gratuitous expenses and put students at risk. The letter was sent to schools across New York and to certain out-of-state institutions attended by New York residents.
He says the investigation, a spinoff of a probe of the student lending industry he launched in 2007, found that many colleges and universities require students to purchase a school-endorsed, private health insurance plan unless students prove that they have comparable insurance coverage.
