College student health insurance costs can blindside families

Hawley Montgomery-Downs was thrilled when her daughter earned a scholarship to cover half the tuition at USC.

But just as Bryn Tronco was starting school in August, the West Virginia mother was shocked to get a bill for nearly $3,000 from USC to cover a student health insurance premium and a fee that allows students to access on-campus clinics and other services.

The fees seemed duplicative to Montgomery-Downs.

“It would be nice for her to go to the student health center, but with buying insurance to go to a primary care provider, it feels like I am paying twice,” she said.

Mandatory medical insurance and health service fees are common at colleges as a condition of enrollment. But the big bill might come as a surprise, making a barely affordable education feel even less so. The costs vary by school but often can amount to several thousand dollars a year — costs that healthcare advocates say should be carefully reviewed by parents and students to ensure they understand their options while also meeting university requirements.

Stephen Beckley, a Fort Collins, Colo., health and benefits consultant to colleges, said the health fee can help reduce students’ insurance premiums. But he can understand how parents may feel as though they are paying double. “That’s a big conundrum for our field,” he said.

Students can seek a waiver to university health insurance by showing they have their own insurance or are covered by their parents’ insurance that meets specific university criteria. Schools typically want to see that a student’s own insurance covers local doctors and hospitals for little out-of-pocket cost. Student health fees, however, generally can’t be waived.

USC, a private university, charges $2,273 a year for its Aetna student health insurance plan. The average for public colleges is $2,712 and $3,540 at private universities, according to a 2022 survey by Beckley’s firm, Hodgkins Beckley & Lyon.

Other prominent colleges charge much more, such as $6,768 at Stanford and $4,163 at Dartmouth College. The University of Colorado charges $3,976.

The easiest solution to avoid these charges would be for students to stay on a parent’s health policy — which the Affordable Care Act allows until they turn 26. But that works only if the student’s parent has a policy that meets the school’s comprehensive requirements and offers in-network coverage where the college is located.

Otherwise, parents may want to shop among ACA marketplace plans to see if they can find a bargain. If their incomes are low enough, students can sometimes enroll in Medicaid or a Children’s Health Insurance Program (CHIP) in states where they go to school. But this strategy has limitations as well. Students must meet state residency requirements where they go to school and parents cannot claim them as a dependent on tax returns. CHIP coverage also expires once a student turns 19.

Schools that charge a student health fee and require insurance coverage say the funding helps cover services at campus health clinics, which otherwise would cost students hundreds of dollars a year or more.

The USC student health fee — which covers primary and preventive health services — also helps the school pay for services not typically covered by insurance, such as monitoring disease outbreaks on campus.

Dr. Sarah Van Orman, chief health officer of USC Student Health, noted that the student health fee provides funding for additional mental health providers on campus and a team focused on sexual assault prevention and education — services available to students without any copayments. She said these additions are vital because, even with insurance, students could face challenges finding private counselors to provide timely help and, if they do, students would have cost-sharing expenses.

“The student health fee supports our public health infrastructure on campus,” Van Orman said.

Because students can get primary health services on campus at the student health center, fewer of them seek care outside it paid for by insurance, she said, and that helps keep the monthly premium on the Aetna student health insurance plan lower. “These things are working together and are not at all duplicative,” Van Orman said.

USC’s student health insurance has an in-network annual deductible of $450 and a $20 copay for physician office visits. It also provides comprehensive services nationwide, so students are covered when at school and back at home — even if that’s across the country. About half the USC students buy the Aetna student insurance, Van Orman said.

Other colleges have a different strategy. For instance, George Washington University’s mandatory health insurance covers health center services on campus. Unless they get a waiver, undergraduates must enroll in the student health insurance plan — costing $2,700 a year. The health plan premium allows students to get many free services at the student health center, including medical office visits, some prescriptions and routine screenings for sexually transmitted infections.

Beckley said college rules vary on whether they allow students to choose insurance plans other than what the school offers.

USC allows students to buy an alternative insurance policy through their parents’ plan or on the ACA marketplace as long as it meets the school’s requirements that include comprehensive health coverage in the Los Angeles area and covering preventive care with zero cost sharing. Out-of-state Medicaid or CHIP plans don’t meet the university’s criteria because they don’t have provider networks for routine care in California.

That was unwelcome news to Montgomery-Downs.

“This is not something we budgeted for,” she said of USC’s health costs.

Montgomery-Downs, a former associate professor at West Virginia University who now works as a freelance editor, said she wasn’t sure what to do when she got the USC health bill. She had thought Bryn, who turned 19 in December, would be covered initially because her CHIP plan provides coverage for treatment at emergency rooms and urgent care centers out of state. And Montgomery-Downs wanted to make sure her daughter had health coverage on summer and holiday breaks when home.

Unsure of which marketplace coverage options would meet the school’s rules and deadlines, she decided to go with the Aetna student plan USC offered.

A look at marketplace options on Covered California shows the $2,200 for the USC Aetna student plan is a competitive rate. The lowest-priced comparable PPO plan offered by California Blue Cross that would provide Bryn a national network of providers costs about $2,400 a year factoring in a government subsidy based on their family income. PPOs provide some coverage for out-of-network doctors and hospitals.

Montgomery-Downs gets her coverage on the marketplace and said she will shop for a marketplace plan for Bryn for the next school year. She said she wishes they had been aware of all the health costs at the time of admission rather than just before classes began.

“It’s all nightmarish, even for someone with the privilege of time and some understanding of these bureaucracies — higher education and medical insurance,” Montgomery-Downs said.

This report was produced by Kaiser Health News, one of the three major operating programs at Kaiser Family Foundation.