I wanna be in America

ITIJ 204, January 2017
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Vast numbers of young people head to the US to further their education, and health insurance is a key consideration for them. Whether this is provided by their school of choice or by an international health insurance provider on a private basis, there is plenty of opportunity for the providers of such policies to gain market share in this area

According to the Institute of International Education’s (IEE) Open Doors publication, in 2015-16 the US welcomed 1,043,839 foreign students to its higher education establishments – an increase of just over seven per cent on the year before. Sixty per cent of these students came from China, India, Saudi Arabia and South Korea1. IEE also publishes data on the top institutions hosting international students, which were New York University, University of South Carolina, Arizona State University – Tempe, Columbia University and University of Illinois – Urbana Champaign.

There’s no doubt about the value that these students bring to the US economy – the US Department of Commerce estimates that US$35.8 billion was contributed by international students in 2014-15. To prevent this demographic turning into any kind of drain on the economy, international students are either strongly encouraged to take out health insurance – in fact, at most educational institutions in the US accepting foreign students, it’s a mandatory requirement – or they are required to by law according to the conditions of their visa. Those students travelling to the US on an F1 visa are not required by law to have health insurance as a condition of obtaining their visa, but those students travelling on a J1 or J2 visa are required to have health insurance for the full duration of their studies. The US Department of State mandates minimum J1 and J2 health insurance requirements that include coverage for medical evacuations of US$50,000 and medical benefits for accident or illness of US$100,000.
Elaine del Rossi, client experience officer of GeoBlue, one of the insurance providers serving this niche market, explained that students don’t have to buy insurance through the school: “Some schools allow students to decline coverage through the school-sponsored plan provided they can show proof of coverage that meets the school’s criteria; in this situation, the student would purchase his/her own coverage.”
Manny Soar, manager of the International Association for Student Insurance Services, explained further: “Most higher education (college and university plans) are benefits rich and also relatively expensive. These are mostly group plans so still cheaper than individual plans. They typically do not need supplementing. In addition, the university plan in itself is private medical cover as in the US there is no public health system. Most university plans are Affordable Care Act (ACA) compliant plans, which is expensive for international students. One of the reasons is the cap in the ratio of premiums between younger and older demographics of 3:1, which means that younger persons effectively subsidise for the claims of older persons. In the case of other types of schools, the group plan offered would also mostly cover requirements, simply because all schools to meet J1 visa requirements work with a local (US) provider.”
Del Rossie said: “Typically, ACA-compliant plans and the companies that offer them don’t have services tailored to international students. International students coming to study in the US have very different needs, from a cultural, language and healthcare perspective. Often they are coming from countries with socialised healthcare, and navigating the American private healthcare system can be challenging.” She went on to explain that ACA-compliant plans are typically offered by domestic insurers and aren’t optimised for use by foreign students. In order to provide an ACA-compliant plan, most schools have foreign students enrolled on the same plan as domestic students, which often means the foreign students don’t have access to the services that are tailored to their unique needs as a non-US student accessing healthcare in the US. GeoBlue offers plans designed for international students that address their unique needs, whether it be multilingual services, or resources and tools to help them understand, navigate and access care in the US. 
Amanda Winkle, vice-president of international sales at International Medical Group (IMG) in the US, pointed out that in some cases, the health plans offered by a school or university are more comprehensive than students want, and thus cost more than they can afford. “Smaller universities,” she told ITIJ, “sometimes provide plans that are not comprehensive enough, and do not offer students the cover they need at a price they can afford. For example, they may offer limited benefits for pre-existing conditions or a longer waiting period before students become eligible for these benefits. These plans can cost more than private international student health insurance, meaning students are paying more for less cover.”
Winkle believes that the international health insurance market is responding well to students’ needs. IMG has seen an uptick in demand for student cover in recent years, and an increase in requests to opt out of school-sponsored plans. 
School-sponsored plans, then, are not always meeting the needs of students – US group plans provided by schools do not always provide emergency medical evacuation and repatriation cover, for instance. In addition, there is a possible gap between a student’s budget and the costs incurred with the school plans, agreed Soar. “The international health insurance market obviously sees the opportunity in addressing these gaps,” he said, “and at the same time maintaining a good level of cover. They still typically cover mental health, maternity and substance abuse. One area where the health cover may be below school plans is on sports – however, most schools have their own separate specific insurance for this.”
 
Doing their duty
Dick Atkins, legal counsel for International Recoveries LLC, explained that universities in the US have an obligation to ensure that their international students have adequate medical insurance in place, due to the fact that there is no universal free or low-cost medical coverage in the US. “In the absence of a specific programme which makes or facilitates the study abroad arrangements,” Atkins explained, “the host US school is clearly in the best position to offer and oversee the needed services and consequently discharge responsibilities imposed in the exercise of due diligence to adequately protect the students. The host schools are charged with an even higher duty of care where minors –
those under 18 years of age – are concerned since they are generally considered as acting ‘in loco parentis’, the equivalent of substitute parents.”
Efforts to expand mandatory requirements of the ACA to travel insurance and study-abroad medical insurance proved unsuccessful, although some states have already begun setting minimum medical insurance requirements for study abroad students and academic institutions and are enforcing certain specific benefits, explained Atkins: “Given the very high cost of medical treatment in the US, schools risk the possibility of being sued by an underinsured student or an aggrieved parent for recommending or permitting insufficient coverage. Medical evacuation coverage is an integral component of any medical insurance policy for people studying abroad, and it is essential that schools mandate realistic limits. The failure of the US school or a programme to require sufficient evacuation coverage may result in a lawsuit in the US by parents forced to pay the excess costs, premised on an alleged failure to meet the applicable duty of care standards.”
Del Rossie of GeoBlue pointed out other efforts that universities can make to ensure students have a safe and happy time at the institution of their choice: “Apart from requiring that students have health insurance coverage, universities also leverage resources such as pre-departure orientations that prepare students and faculty for travel, providing students and faculty with country risk profiles and alerts, and in some cases offering specialised evacuation and crisis assistance services in situations of political unrest or natural disaster.”
 
Providing assistance services
College is a transformative and often difficult time for many students, and when you factor in living in another country to attend school, international students face even more challenges. Providing assistance services, then, can be a complex process. Winkle of IMG noted language barriers, financial obstacles, lack of access to a local support system or social network, and having to suddenly navigate a foreign healthcare system as particular challenges many international students must overcome – and they will need the help of an assistance company to do so.
Del Rossie pointed out that not understanding the healthcare system that they are trying to access can be a challenge for international students, so having an insurer that offers a multilingual service is important. “Although they speak and understand English,” she said, “understanding how healthcare works in the US as well as their benefits and the complex jargon associated with US healthcare plans can be daunting. GeoBlue, whose products are designed to speak to the needs of an internationally mobile population, can help make this situation less challenging.”
When it comes to offering multilingual assistance services, it seems essential that insurance companies offer the opportunity for the insured to speak to someone in their native language. Mandarin speakers, then, could benefit from this. Chinese students, Winkle confirmed, form a significant portion of IMG’s international student business, and Del Rossi said that this is also the case for GeoBlue: “All signs indicate that international students, especially from China, will continue to be a strong and growing market for US universities and therefore for our business.” 
 
Opportunity for growth
The attraction of US universities and colleges is no mystery – international recognition of another degree, the chance to study in a fascinating country that has a lot to offer its alumni, and the opportunity to improve language skills are all big draws among international students. The cost of the healthcare in the country, though, should give many pause for thought. The need for a comprehensive, good quality health insurance plan is undeniable, and although it can be a complex task for the providers of these policies to achieve regulated status in each of the states in which they wish to do business, there is no doubt that the rewards are worth the risk.

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