The lowest priced plans are eagerly purchased by the price sensitive and courageous international students who think they will never need to use their health insurance. It’s probably also true that many students are arriving from countries with socialized medicine or affordable healthcare. It is likely that students coming into the US for the first time do not understand how expensive healthcare is in the United States.
Yes, many of these economical plans have benefits that pay up to $150,000 or even $250,000 per illness per injury. To a young person this certainly seems like a more than adequate amount. However, when you dig deeper within these policies’ details there are internal limits or caps on reimbursement amounts for particular services. For example, the reimbursement on surgeries can be capped at $4,000 maximum.
A typical surgery will include costs for the facility, surgeons, anesthesiologists, lab, medications, dressings, and other medical services and supplies. That’s a lot to pay for. Something like appendicitis is unpredictable and can strike at any time. And the bills can be in the thousands of dollars. In fact, in 2014 the average cost of an appendectomy was $33,0001. With internal limits for surgery at $4,000 maximum, the student would be stuck with a $29,000 bill!
We believe a much more practical plan for students (without pre-existing concerns) would be a policy moderately priced with more liberal internal limits. Such a plan could be purchased for about $0.60 more per day. Under this plan, the same appendectomy would be covered at 80% of the bill until the member pays $2,000. Once the $2,000 is paid, eligible expenses are paid at 100%.
It’s critical to make sure students read the policies before making a purchase. We always advise they read and understand the table of benefits, the exclusions, and the definitions. Our job as insurance professionals, international student advisors, student health employees- all involved- is to help educate what is being purchased.