Ten of the largest health insurers covering students – including Aetna and UnitedHealthcare – were recently subpoenaed in an ongoing investigation into what the New York Attorney General’s Office says is inferior coverage at colleges in and around the state.
Andrew Cuomo
Also subpoenaed were five insurance brokers, agents and consultants, amid allegations they are not meeting their clients’ best interests.
Attorney General Andrew Cuomo said that an investigation by his office has revealed “troubling practices” of school-sponsored student health insurance and has cautioned more than 300 colleges, universities and professional and trade schools to review their plans through the major insurers.
Cuomo’s office found evidence it says suggests that many of the school-endorsed plans have extremely low coverage limits, excessive costs for coverage provided and inconsistencies with federal protections recently made law.
Several institutions require students to buy a school-endorsed plan through a private insurer unless they can prove coverage through a comparable plan, Cuomo’s office said.
Many of the sponsored plans investigated by his office “leave students at risk while providing massive profits for insurance companies,” Cuomo said in a statement.
“It is important for students to have adequate health care coverage to protect themselves during times of illness or injury, but a bad health insurance plan can have catastrophic and long-lasting effects on a young person’s life,” the attorney general said. “By being informed of the problematic practices that currently exist in the industry, schools can negotiate for better health plans, and students and their families can be better equipped to select the coverage that is best for them.”
Among the more detailed findings of the investigation, Cuomo’s office found that in addition to providing limited coverage, many school-sponsored plans are “unnecessarily costly.” The amount of claims paid out by the insurer is only a fraction of the premiums students pay in many cases, generating excessive profits for insurers.
Furthermore, the investigation exposed “troubling conflicted relationships” between agents and health insurers involving undisclosed contracts creating incentives for agents to work against the best interests of students and to persuade schools to take and maintain overly costly plans, Cuomo’s office contends.
In a letter to the more than 300 schools, Cuomo’s office advises a review of policies related to student health plans and modifications, if warranted, to ensure they are fair.
Subpoenas were sent to the following insurers who were subjects of the investigation: Aetna Inc.; United Healthcare Insurance Co.; Gerber Life Insurance Co. Markel Insurance Co.; Beech Street Corp. (PPO); United States Fire Insurance Co.; Combined Life Insurance Co. of New York; National Union Fire Insurance Co. of Pittsburgh, PA; Security Mutual Life Insurance Co. of NY; and Commercial Travelers Mutual Insurance Co.
Insurance consultant Benefits LLC, brokerage University Health Plans and agencies Niagara National Inc., Haylor, Freyer & Coon and The Bailey Agencies also were issued subpoenas by Cuomo’s office.
N.Y. AG says inferior health plans, agent deals ‘leave students at risk’ via IFAwebnews .