Health insurance options for college students
Many college students find themselves needing medical care when they do not have insurance because of the cost of insurance premiums. The American College Health Association has recommended that students be required to have health insurance coverage. Students need to know there are options for getting health insurance and that coverage is critical in case of a major medical emergency or a “catastrophic event.”
Catastrophic coverage is health insurance that assures that you have access to health care and financial protection under the worst possible circumstances. Getting a cancer diagnosis would be considered a “catastrophic event.”
For students, there are several available options. With any plan, coverage should be checked for common tests requested from students, like blood tests or Pap tests. Also, if you have any medical condition that you are concerned about, you may want to check with the insurance company about its policy on “pre-existing conditions” or medical conditions that were present when applying for health insurance. Here are the most common types of health insurance options for students.
College or University Sponsored Insurance Programs (SHIPs): The college or university may offer a reduced cost student health insurance. Make sure that this type of insurance includes catastrophic coverage, with at least a $500,000 lifetime maximum. Sometimes the plan may claim a high lifetime maximum, but limit it on a yearly basis. For example, it may be limited to only $100,000 per year. This may not be adequate coverage for a catastrophic illness. Make sure that you understand how long you are covered and whether it is only active coverage as long as the beneficiary is enrolled in classes. Often an advantage of this plan is that it is integrated to cover any charges that you may acquire at the Student Health Service. Consider also that often many colleges and universities maintain a counseling center where students can get short-term therapy at either no or low cost visit co-payments.
Employer-sponsored Coverage: This is coverage for the student under his or her parent’s employer. With this type of insurance, the student must be dependent (for tax purposes) on his or her parent or guardian; often must be a full-time, not part-time student; and cannot be older than age 23 to 25. Sometimes the cost of this insurance is high, the health care providers may not be within an HMO’s service area, and service may not be integrated with the college’s student health services or counseling centers.
Individual Insurance: There are individual health insurance plans from private companies that often cover students at lower costs. This may include companies like Kaiser Permanente and Blue Cross/Blue Shield. Some of these insurers require that you live in the state for 6 months before you are eligible for coverage under their plan. Check for catastrophic coverage. Also make sure this type of insurance does not exclude coverage based on any pre-existing conditions.
Uninsurable Risk Programs: There are several states that provide special coverage for people who have a pre-existing condition (a condition that was present before the coverage was applied for) and do not qualify for individual health coverage. Your state’s department of health insurance can give you more information about this.
Medicaid, Indian Health Services, Dependents of Active Duty US Military, or Other Governmental Aid Programs: These types of programs are available, although some states exclude full-time students from these programs if they are working mostly with a poor population.
State coverage and health insurance options for the hard-to-insure
A number of states currently sell comprehensive health insurance to state residents with serious medical conditions who can’t find a company to insure them. These state programs, sometimes called “risk pools,” serve people who have pre-existing health conditions and are often denied private health insurance or have difficulty finding affordable coverage. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides nationwide standards and a guarantee of access to health insurance coverage in the individual market.
Health insurance risk pools
Health insurance risk pools are special programs created by state legislatures to provide health insurance for the “medically uninsurable” population. These are people who have been denied health insurance coverage because of a medical condition, or who have physical conditions that make them unable to purchase health insurance at any price.
A risk pool is created by a state and at present 34 states have them. They are non-profit associations and in most states do not require tax dollars to operate. Risk pools do require you to pay premiums, but some have programs so that low-income people do not have to pay as much.
Who is eligible to participate in a risk pool?
People applying for plan coverage must be residents of that state. State legislation outlines a range of requirements for eligibility such as proof of at least one of the following:
- that you have been rejected for similar health insurance by at least one insurer
- that you are presently insured and your current insurance has a higher premium than offered under the state plan
Many of the state plans do not allow you to apply for the risk pool if you are eligible for or are receiving Medicare or Medicaid. But some states have adopted a high-risk plan for people who are Medicare eligible.
Many states have also placed an enrollment cap on their plans. This means the plan will accept only a certain number of people into the plan at any one time. Others applying for coverage must go on a waiting list to get into the plan. Look at the section “States that Have Risk Pools” for a list of individual states and contact information.
Financial issues: getting money when you need it
The major costs of a cancer diagnosis and treatment include charges for time in the hospital, clinic visits, medicines, tests and procedures, home health services, services of doctors and other professionals, and treatment (surgery, chemotherapy, radiation therapy, and bone marrow or peripheral stem cell transplant). Insurance, managed care, or public health care programs pay most of these costs.
Families also face many indirect costs or “out-of-pocket” expenses. These costs can be for travel (gas and parking); places to stay, meals during admissions or clinic visits; extra child care costs; long-distance calls to doctors, friends, and relatives; special foods and nutritional supplements; and special equipment or clothing. Also, a child’s treatment plan can cause parents to lose time at work and, in some cases, their salary. Even more money is lost if one parent has to quit a job or take an extended leave of absence. Of course, costs increase as treatment is extended, if there is recurrence of the cancer (it comes back), or if there are treatment complications.
Viaticals and living benefits from life insurance policies
Life-threatening illnesses and conditions that need a lot of medical care often lead to a need for immediate cash income. In many states, your life insurance policy may be a source of income through the acceleration of the policy’s death benefit, known as “living benefits.” You can use these benefits in several ways, including viaticals (sale of the life insurance policy) and loans against the face value of the life insurance policy from the original insurance company or from a third party.
Viaticals
A viatical is the sale of a life insurance policy for cash. The person insured (called the viator) sells his or her life insurance policy to a third party. As with any sale, what is being sold and how much it is being sold for are questions both sides must agree on.
A viatical transaction usually takes place when someone has a limited life expectancy. The person’s life expectancy may be less than 6 months or as much as several years and must be certified by a doctor. The patient is probably unable to work and is likely to have a low income. To reduce money worries, the patient sells the life insurance policy for a lump sum cash payment. The payment is often between 60% and 80% of the face value of the policy, and is usually tax free. The payment belongs only to the holder of the policy.
A viatical insurance company buys policies from people with terminal illnesses. The viatical company becomes the new owner and sole beneficiary of the policy. It pays the premiums on the policy as long as the patient is alive. When the person dies, the death benefit from the policy goes to the viatical company.
Reasons for choosing a viatical:
- to pay for food, shelter, doctor visits, or other pressing needs
- to ease the stress of money worries
- to fulfill a lifelong dream
Drawbacks of a viatical:
- Your heirs receive no insurance money.
- You may not make the best trade available.
- Decision-making may be difficult.
- Once a policy is sold, the sale is usually not reversible.
Line of credit from a finance company
In this case, people with cancer who are not expected to live a long time transfer their life insurance’s death benefit to a finance company. The company reviews your health status, then makes “advances” on the expected benefit. This is actually a loan, and as with all loans, interest rates vary. You may borrow up to 35% to 75% of your insurance’s death benefit, depending on your situation. The death benefit is reduced by the loan amount, the premiums the company pays on the policy, fees, and the interest on the loans you have taken out. Not all life insurance is eligible. This is a new type of loan, and not offered by many companies at this time.
Living benefits and other choices
You also have other choices. You may be able to get a personal loan, or, instead of selling your policy outright to a third-party viatical company or transferring your death benefit, you may be able to get more money from the original insurance company. Many insurance companies make it possible for life insurance policy owners to collect all or part of their death benefits early — before dying — to cover extraordinary expenses. A life insurance policy usually pays benefits to a beneficiary after a policy owner dies. But in certain cases, those benefits are accelerated and are paid directly to a chronically or terminally ill policy owner before he or she dies. These are called living benefits or accelerated benefits.
In general, living benefits can range from 25% to 95% of the death benefit. The payment depends on your policy’s face value, the terms of your contract, and the state you live in. Ask your insurer to provide you with a quote before you exercise your accelerated death benefit claim. Living benefits are not intended to replace health insurance or long-term care insurance. They can, however, give you extra help with needs that result from terminal or catastrophic illness. Contact your insurance agent or company for details on your policy’s accelerated benefits plan.
For more information regarding living benefits from life insurance, please visit the American Council of Life Insurers Web site at www.acli.com.
Another choice is to get a loan from a third party. Some companies will lend money to terminally ill people who have a life expectancy of between 6 months and 5 years. The patient’s life insurance policy is used as collateral. The company will lend a portion of the policy’s face value, usually ranging from 35% to 85%, which will be paid back from the proceeds of the policy at the time of the patient’s death. Any surplus funds revert to the original beneficiary. The interest rates on the loans vary but may range from 13% to 18%. There are no restrictions on how the money may be used.
Signing a contract for a viatical or living benefits: Before you make a final decision, think about the points below. Talk to a lawyer or a financial planner to help you decide what is best in your case.
- Get a clear picture of what’s involved. Read about viaticals. Ask questions.
- Get professional advice regarding types of living benefits available and the pros and cons of each.
- Decide whether a viatical is really the best course of action for you.
- Talk to your doctor about how long you can expect to live.
- Find out if Medicaid or other benefits will be affected.
- Shop around. Get several bids. Bids can vary from 35% to 80% of the policy.
- Find out if the company is a broker. Some companies use their own money to buy policies, but others are brokers. A broker gets a commission from the company and may not act in your best interest.
- Negotiate; you might get a better deal.
Outside sources of financial help
Most families find it hard to turn to others or to agencies and funds for financial help. Families generally take pride in standing on their two feet and taking care of their own needs. The extra expenses of cancer may be the first time a family has had problems with money. Families should remember that their problems in this situation are short-lived and not unique. In the future, they may be the ones who can offer help to others.
There are many possible sources of help for families who need some extra financial support at this time:
- Income assistance for low-income families through Supplemental Security Income (SSI) benefits.
- Income assistance for needy families from the Temporary Assistance for Needy Families (TANF) program.
- Help with travel, meals, and lodging from public and private programs.
- Assistance with basic living costs (such as rent, mortgage, insurance premiums, utilities, and telephone) from public and private programs.
- Help from church, civic, social, and fraternal groups in the community.
Help may also be available from groups such as the Salvation Army, Catholic Social Services, the United Way, Jewish Social Services, and others that can be found in the yellow pages. The American Cancer Society also has many helpful services.
Sources of help with temporary lodging
Many treatment centers have short-term housing centers or discount programs set up with nearby motels and hotels. The clinic social worker or oncology nurse may have suggestions for low-cost housing during the hospital or clinic treatment.
The American Cancer Society has a limited number of Hope Lodges throughout the United States that provide places for families to stay during cancer treatment. Contact the ACS for information about a Hope Lodge near you.
Most major treatment centers have a Ronald McDonald House nearby. These houses provide low-cost or free housing to patients and their immediate family. Ronald McDonald houses are designed to offer a nice break to any family with a seriously ill child, not just those with limited funds. Although partly funded by McDonald’s Children’s Charities, each house has its own management, sets its own admissions criteria, and operates according to its own rules. Check with your health care team’s social worker or nurse for more information.
Sources of help with housing needs or mortgage payments
The extra expenses of treatment or major loss of family income may make it hard for families to meet their mortgage or rent payments on time. To keep a good credit rating, it is important to talk with your creditors or landlords about your situation and try to make special arrangements. Family, friends, or church members may provide short-term help if they are made aware of the problem. Talk about your situation with the team social worker who may know of special resources.
Families who need to move out of housing after a cancer diagnosis should talk with the county department of social services to find out if they qualify for government supported housing programs.
Sources of help with transportation costs
People who have Medicaid are entitled to help with travel to medical centers and doctors’ offices for treatment. This may take the form of payment or reimbursement for gas, payment of bus fare, or may involve using a vanpool. County departments of social services in each state arrange this transportation assistance, but families must request it by speaking with their Medicaid eligibility worker.
The American Cancer Society’s program, Road to Recovery, is available in some areas. In this program volunteers drive patients and families to hospitals and clinics for treatment. In some parts of the country, the ACS may also provide some limited help with the cost of gas. Contact your local American Cancer Society office for more information on what type of transportation program is available in your area.
The Leukemia & Lymphoma Society, through its Patient Aid program, helps families with the cost of gas and parking for outpatient treatment. There is a limit on the amount of financial help available yearly to each patient and family.
Community and church groups may be sources of help with travel or its costs, too. Also, talk about getting help with hospital or clinic parking fees with the team social worker.
The National Patient Travel Helpline provides information about all forms of charitable, long-distance, medical air transportation. It also provides referrals to all appropriate sources of help available in the national charitable medical air transportation network. The hotline number is 1-800-296-1217 or contact the web site at www.patienttravel.org.
Sources of help with telephone service
Help with the cost of basic charges for telephone service may be available for temporary assistance for needy families. Speak with the eligibility worker in your county department of social services for more information. Families that have problems controlling long-distance charges may want to think about buying prepaid calling cards. Sometimes cell phone carriers will help out in short term situations so that you can avoid going over your cell phone minute limit for the month. Call your cell phone company before you go over your limit to see if they can give temporary help or suggest a better plan for you.
Sources of help with food costs
Some government programs help with food costs. These programs include the following:
- School meals, such as
- the Child and the National School Lunch Program
- the School Breakfast Program
- the Special Milk Program
- the Adult Care Food Program
- the Food Stamp Program
- Women, Infants and Children (WIC)
- the Summer Food Service Program
- Food Distribution, such as the Commodity Supplemental Food Program
These programs are run by the U.S. Department of Agriculture and you can learn more about them on their Web site at www.fns.usda.gov/fns/default.htm.
You may also get general help from special funds in your medical center or community, or assistance from targeted fundraising for an individual patient or family.
The team social worker can give you more information about resources that might benefit you and your family. There are organizations and written materials that can provide information on fundraising strategies too.
Disability benefits
If you cannot work, find out if you have a long-term disability insurance policy. This type of policy typically replaces 60% to 70% of your income. Evaluate your policy by finding out the definition of “disabled,” the monthly benefit amount, the benefit period, the waiting period, and its taxability status. Some companies also have a short-term disability option that covers you during part or all of the waiting period of the long-term disability policy.
Social Security Disability Income (SSDI)
If you have been working for many years, you probably have contributed to Social Security. In this case, you may qualify for disability benefits. However, you must meet Social Security’s definition of disability, which is narrow. If you get turned down, it is best to appeal the decision. Some cases that were turned down originally end up being approved after an appeal. When approved, benefits do not begin until the sixth full month of disability. Your income has nothing to do with whether or not you qualify for SSDI. To find out how to apply, call the Social Security Administration.
Also keep in mind that after receiving SSDI for 24 months you become eligible for Medicare benefits.
Supplemental Security Income (SSI) benefits
SSI is designed to supplement the income of an eligible person or family in which there is a disabled person. The family or the person must have low income and limited assets. If you have not worked much or if your income was very low before you became unable to work, you may be eligible for Supplemental Security Income (SSI). To get SSI, your income and assets must fall below a certain level; you must be disabled, over 65, and/or blind. The amount you could get from SSI varies from state to state. If you do qualify, SSI pays you a monthly income that could be as much as $600 or more. Cost of living increases are given yearly.
Children can qualify if they meet Social Security’s definition of disability. Income criteria are checked by the local Social Security Administration office and the determination of disability is made by disability evaluation specialists at the state Social Security office. Children with certain cancer diagnoses are considered disabled.
In most states, Medicaid is provided automatically to children receiving SSI. In others, a separate application must be made. You can get more information about SSI from the team social worker or from the nearest Social Security Administration office listed in the U.S. Government section of the telephone book.
Temporary Assistance for Needy Families (TANF)
TANF is a program that replaced the former Aid to Families With Dependent Children (AFDC) program, administered by the Office of Family Assistance under the U.S. Department of Health and Human Services. TANF is a grant that gives states help in providing job opportunities to the people in their welfare programs. A social worker may be able to tell you the status of your state’s plan that is most like the former AFDC plan.
States that have health insurance risk pools
Listed below are the states that currently offer risk pools. If your state isn’t listed, you may want to contact the state department of insurance to find out if such programs are available in your state. Call directory assistance in your state capitol for information.
Alabama Health Insurance Plan
Toll-free number: 1-877-619-2447
Web site: healthinsurance.about.com/od/statespecificinformation/a/alabama.htm
Alaska Comprehensive Health Insurance Association
Toll-free number: 1-888-290-0616
Web site: www.achia.com
Arkansas Comprehensive Health Insurance Plan
Toll-free number: 1-800-285-6477
Web site: www.chiparkansas.org
California Comprehensive Major Risk Medical Insurance Program
Toll-free number: 1-800-289-6574
Web site: www.mrmib.ca.gov/MRMIB/MRMIP.shtml
CoverColorado
Toll-free number: 1-877-461-3811
Web site: www.covercolorado.org
Connecticut Health Reinsurance Association
Toll-free number: 1-800-842-0004
Web site: www.hract.org/hra/index.htm
Idaho Individual High Risk Reinsurance Pool
Toll-free number: 1-800-721-3272 (in-state only)
Web site: www.doi.state.id.us
Illinois Comprehensive Health Insurance Plan
Toll-free number: 1-866-851-2751 (in-state only)
Web site: www.chip.state.il.us
Indiana Comprehensive Health Association
Toll-free number: 1-800-552-7921
Web site: www.onlinehealthplan.com
Health Insurance Plan of Iowa
Toll-free number: 1-877-793-6880
Web site: www.hipiowa.com
Kansas Health Insurance Association
Toll-free number: 1-800-362-9290
Web site: www.khiastatepool.com
Kentucky Access
Toll-free number: 1-866-405-6145
Web site: www.kentuckyaccess.com
Louisiana Health Plan
Toll-free number: 1-800-680-8728
Web site: www.lahealthplan.org
Maryland Health Insurance Plan
Toll-free number: 1-866-780-7105
Web site: www.medhealthinsurance.com/high-risk-coverage.htm
Minnesota Comprehensive Health Association
Toll-free number: 1-866-894-8053
TYY: 1-800-841-6753
Web site: www.mchamn.com
Mississippi Comprehensive Health Insurance Risk Pool
Toll-free number: 1-888-820-9400
Web site: www.doi.state.ms.us/htm_files/mchirpa.html
Missouri Health Insurance Pool
Toll-free number: 1-800- 821-2231
Web site: www.mhip.org
Montana Comprehensive Health Association
Toll-free number: 1-800-447-7828
Web site: www.mthealth.org
Nebraska Comprehensive Health Insurance Pool
Toll-free number: 1-877-348-4304
Web site: http://www.nechip.com
New Hampshire Health Plan (NHHP)
Toll-free number: 1-877-888-6447
Web site: http://www.nhhealthplan.org
New Mexico Medical Insurance Pool
Toll-free number: 1-800-432-0750
Web site: http://www.nmmip.com
Comprehensive Health Association of North Dakota (CHAND)
Toll-free number: 1-800-737-0016
Web site:http://www.chand.org
Oklahoma Health Insurance High Risk Pool
Toll-free number: 1-800-255-6065
Web site: www.oid.state.ok.us/consumer/hrp.html
Oregon Medical Insurance Pool
Toll-free number: 1-800-848-7280
Web site: http://www.omip.state.or.us
South Carolina Health Insurance Pool
Toll-free number: 1-800- 868-2500
South Dakota Risk Pool
Phone: 605-773-3148 (ask for a Risk Pool representative)
Web site: http://www.state.sd.us/bop/riskpool.htm
Tennessee AccessTN
Toll-free number: 1-866-CoverTN (1-866-268-3786)
Web site: http://www.covertn.gov/web/access_tn.html
Texas Health Insurance Risk Pool
Toll-free number: 1-888-398-3927
TDD: 1-800-735-2989
Web site: http://www.txhealthpool.org
Utah Comprehensive Health Insurance Pool
Phone: 1-801-442-6660 for Salt Lake area only; 1-800-705-9173 for rest of state
Web site: http://selecthealth.org
Washington State Health Insurance Pool
Toll-free number: 1-800-877-5187
Web site: http://www.wship.org
West Virginia Health Insurance Plan / AccessWV
Toll-free number: 1-866-445-8491
Web site: http://www.wvinsurance.gov/accesswv
Wisconsin Health Insurance Risk Sharing Plan
Toll-free number: 1-800-828-4777
Web site: http://www.hirsp.org
Wyoming Health Insurance Pool
Toll-free number: 1-800-442-2376 (in-state only)
Web site: http://www.cancer.org
National organizations and Web sites*
Americans with Disabilities Act
Toll-free number: 1-800-514-0301
Web site: www.ada.gov
Association of Community Cancer Centers
Web site: www.accc-cancer.org
Cancer Legal Resource Center (CLRC)
Toll-free number: 1-866-843-2572 (may need to leave a number for a call back)
Web site: wwww.cancerlegalresourcecenter.org
Centers for Disease Control and Prevention (CDC)
Information on TANF
Toll-free number: 1-800-311-3435
Web site: www.cdc.gov
Department of Health and Human Services
Toll-free number: 1-877-696-6775
Web site: www.hhs.gov
Department of Veterans Affairs
Information on TRICARE (formerly CHAMPUS)
Toll-free number: 1-(800) 827-1000 (reaches local VA office)
Web site: www.va.gov
Health Insurance Info
Georgetown University Health Policy Institute
Web site: healthinsuranceinfo.net
Hill-Burton Program
Toll-free number: 1-(800) 638-0742
Web site: www.hrsa.gov/hillburton
Internal Revenue Service (publications)
Toll-free number: 1-800-829-1040 / 1-800-829-4059 (TTY)
Web site: www.irs.gov
Medicare Hotline
Toll-free number: 1-800-633-4227
Web site: www.medicare.gov
National Cancer Institute
Toll Free Number: 1-800-422-6237 or 1-800-4-CANCER
Web site: www.cancer.gov
National Association of Insurance Commissioners (NAIC)
Telephone: 866-470-6242
Web site: www.naic.org
National Association of Hospital Hospitality Houses, Inc. (NAHHH)
Toll-free number: 1-800-542-9730
Web site: www.nahhh.org
Registered Financial Planners Institute
Telephone: 1-440-282-7176
Web site: www.rfpi.com
Ronald McDonald House Charities (RMHC)
Telephone: 1-630-623-7048
Web site: www.rmhc.org
Social Security Administration (SSI)
Toll-free number: 1-800-772-1213 / 1-800-325-0778 (TTY)
Web site: www.socialsecurity.gov
The Leukemia & Lymphoma Society
Toll-free number: 1-800-955-4572
Web site: www.lls.org
U.S. Department of Agriculture
Food and Nutrition Service
Nutrition Assistance Programs
Toll-free number: 1-800-FED INFO or 1-800-333-4636
Web site: www.fns.usda.gov
U.S. Department of Labor, Employee Benefits, Security Administration (EBSA)
Information on COBRA, Medicaid, Medigap, FMLA, HIPAA requirements of employer-based insurance coverage
Toll-free number: 1-866-444-3272 (1-866-444-EBSA)
Web site: www.dol.gov/ebsa
U.S. Equal Employment Opportunity Commission (EEOC)
Toll-free number: 1-800-669-4000
Web site: www.eeoc.gov
Life Insurance Settlement Association (for information on viaticals)
Telephone: 1-407-894-3797
Web site: www.lisassociation.org
*Inclusion on this list does not imply endorsement by the American Cancer Society.
Other publications
Landay, David. Be Prepared: The Complete Financial, Legal, and Practical Guide for Living with a Life-challenging Condition. New York: St. Martin’s Press, 1998.
No matter who you are, we can help. Contact us anytime, day or night, for information and support. Call us at 1-800-ACS-2345 or visit http://www.cancer.org.