Have you purchased health insurance through a college or university recently? Be advised that those seemingly trustworthy institutions are selling some slimy merchandise: health insurance. BusinessWeek reports that many people with claims under those policies are finding themselves not-so-insured:
More than half of the insurance plans recommended by colleges offer benefits of $30,000 or less, according to a survey published in March by the General Accounting Office
Really? $30,000? The average group policy I’m familiar with has benefits of $2,000,000. If something really goes wrong—and isn’t that what insurance is for?— $30K is nothing, as several of the people in the article found out.
The policies were marketed using terms like “major medical coverage” and “catastrophic accident”, but there is nothing “major” about $30K of coverage. Of course, one can argue than parents and students should be reading the policies closely and shopping around. But, realistically, how many people have the time and skill to compare stuff like this. In addition to being on the lookout for overall caps on benefits, anyone looking to buy one of these policies needs to be aware that insurers are increasingly using “interior caps”– limitations on what they will pay for specific incidents and procedures. The intentionally confusing marketing and misplaced trust of parents and students has led to a “veritable gold mine” for some of the insurers, according to BusinessWeek.
And who were those insurers? Where did the colleges get those policies? The name “UnitedHealth” runs throughout the article. Let’s see, UnitedHealth. Isn’t that the company that was scammed by it’s own CEO?
Yes it is! William McGuire ran the company until 2006 when the Wall Street Journal revealed that he and fellow directors had been illegally backdating stock options to increase their compensation. Under pressure McGuire bailed in December 2006 with the largest golden parachute in the history of corporate America, $1.1 billion. Once a scammer always a scammer.