student insurance and accident and illness and disease

One of the many decisions confronting a parent when a child goes off to college, especially if it is to an out-of-state school, is whether to purchase the accident and health insurance plan offered through the college to cover the child while s/he is away at school. After all, many family health plans don't offer sterling coverage in out-of-state situations; purchase of additional health insurance can seem to be exactly the right decision to make to give the parent peace of mind and the student additional coverage. This was my general mindset when I sat down to contemplate the "Blanket Accident and Health Plan" offered my son by a reputable underwriter in New York. For a mere $520 or so I could insure him for covered accidents and illnesses/diseases from 12:01 a.m. (coverage always begins right after midnight for some reason) on August 1, 2005 until that same time on August 1, 2006. All was fine until I decided to do what no normal American adult does--read the policy.

Accidents and Illnesses

When you read a policy you always begin by looking at which terms they decide to define. Because this was an "accident and health" plan, I decided it was necessary to see how they defined "accident" and "illness." The scope of those definitions determines the scope of coverage. Accident, not unexpectedly, is defined fairly narrowly. The key to the concept of accident is to realize that it is something sudden and unexpected. Unlike a commercial general liability policy, where the language of "accident" morphed into language of "occurrence" about 30 years ago, thus providing a wider scope for coverage for business misfortunes, health policies usually restrict coverage under accidents to what we naturally think of as accidents--when something falls on you or you fall on something or some large object rams into you. Ok. Clear enough.

But sickness is probably more prevalent than accident, and so I read the definition of sickness carefully. I had to read it four times, becoming more confused each time. First sentence. "Sickness means disease or illness which causes a loss while the insured is covered by this policy." Couldn't be clearer. Second sentence.

"In the event 75% of the eligible students of the policyholder, reaching a minimum of 300 students are insured, then Sickness means illness or disease resulting in Loss covered by this policy."

HUH??

Two things immediately were not clear. Does this suggest that a coverable sickness is based on the number of students who enroll in the plan? It seems so. And second, is it 75% of the institutional enrollment that triggers coverage under the sickness prong or is it 300 students? The language on the latter question seems almost deliberately opaque. If I had to take a guess it would be that 75% of students must be covered in order for this definition of sickness to be operative. In a case where there were fewer than 400 students, then 300 (or more than 75%) would have to be covered for this to happen. That is, a minimum of 300 in all institutions must be covered, and if the enrollment exceeds 400, 75% must be covered for this definition to apply. This is my best guess at interpreting this passage. A lawyer, who no doubt wrote it, couldn't have made it more confusing.

Of course the problem that results with this interpretation is that my son would never really know if he was covered for sickness--unless numbers of covered students were posted by the school. Can't you just see the phonathons going on--"Please, all we need are 20 more students to buy coverage so that we can all be covered for sickness. Please buy this insurance." I can't think of anything weirder.

Calling People

So, I decided to call the underwriter. The person answering the phone claimed to have knowledge, but her explanation was as clear as the Cuyahoga River the minute before it caught fire. I asked to speak with her boss. When the boss came on the line and I pointed out the problem, she hemmed and hawed for a bit before saying that the sentence was "mistaken." It should not have appeared there. It should have gone only in the definition of "Preexisting Conditions." I said, "Why did you put it here, then?" She said that someone didn't proofread the brochure carefully. I guess not. But then she said, a little defensively, that the brochure was not the policy and that, in fact, the policy was at the college where proper coverage was defined. A bit nonplussed, I reminded her that misrepresentations in brochures were not the way to win friends and get a reputation for good service. I urged her to change the brochure language; my sense is that they will do something.

Then I decided to call the college health services. Because they send out the brochure in their mailing, they are the agents of this underwriter and the insurer that stands behind the plan. I asked the person who answered if she knew the policy and its language. She confessed that she and the doctor discussed the definition of "sickness" a week or so previously and didn't understand what was going on, but didn't really do anything about it. I mentioned to her that the way it reads is that coverage for sickness is only triggered when a certain number of students are covered. In this case it would be more than 2000 students. She was sure that the underwriter/insurer would cover all sicknesses; after all they had done so previously with nary a whimper. I mentioned to her what I said to the underwriter--that it was the obligation of those offering the policy to be clear on what they covered, and that written clarification was necessary in order to remove doubts in this case. She mentioned that this 75% rule seemed to be new this year. I decided to spare her the lecture of why insurance companies and their lawyers decide to mess with policy language without fully clarifying to their customers why they do so.

The Result

Who really knows if anything will come of this? I have decided under these circumstances not to purchase the policy coverage for my son this school year. My ex is checking to make sure that her policy covers him while he is away at college, though at a lesser reimbursement rate, than the policy offered through the school. In any case, I have also decided to have a firm and serious discussion with my son about avoiding Greyhound busses, falling trees and other hazards of New York life as he goes East to college. I know he will sit rapt while I talk to him of this.