Strapped by tuition increases and declining enrollment, U.S. colleges and universities are cracking the books in hopes of graduating and moving past their own health insurance reform crises.

According to a story appearing today on CMN – College Media Network, Portland State University’s voluntary student health insurance program is slowly dying.

PSU health insurance, currently underwritten by Aetna Life Insurance Company, provides two different plans: basic and supplemental.

The basic plan covers visits to the the university’s medical facilities. The supplemental plan is preferred for outside doctors and emergency room visits. PHU spokesman Walden
Poublon explained that since students who utilize the supplemental plan often need and seek expensive health care, the insurance providers lose money each year, causing rates to increase or coverage in the plan to decrease in order to stay affordable.

PSU is among a growing list of public and private colleges and universities extending health coverage to students at a lower premium than they could obtain for themselves. While considered by parents and students to be a benefit, the challenge for such schools is to make plans more affordable so more will purchase it, thus creating a larger pool of money available for everyone’s health care.

Over time, fewer students have elected to enroll in the supplemental plan while prices have increased. This trend has decreased the pool of money available to students, which is why insurance providers lose money and are forced to increase rates. This is the “death spiral,” Poublon said.

PSU recently signed with Aetna after receiving competing quotes from other health insurance companies. But was clear that the current plan with Aetna is merely a Band-Aid solution that is not sustainable and is on borrowed time. If the past is any indication of what to expect in the future, few students will elect optional supplemental plans, causing insurance companies to lose money and then increase rates or decrease coverage.

But student health insurance is recovering thanks in part to creativity on behalf of college administrators forced to either abandon coverage or grow their groups.

As for PSU, Oregon State University and University of Oregon are in talks about the possibility of pooling students at all three campuses to buy a mandatory hard-waiver health care plan as a group. This could lower insurance costs for all three schools.

A mandatory hard-waiver health insurance policy would require students to be covered by a comprehensive health insurance plan that would be a part of students’ tuition and fees. Students may be excluded from the plan if they have comparable health insurance through a parent or employer.

This would prevent students who already have health insurance outside of the school from paying a mandatory health fee each term—essentially “opting out.” Another benefit is that students could have access to better health insurance that could be paid by financial aid.

Other schools have successfully adopted hard-waiver programs. Aetna Student Health has implemented hard-waiver programs at approximately 80 institutions, including Boston College, Clemson University, Cornell University, Dartmouth College, Duke University, Harvard University, Northwestern University, Miami University and the University of Pennsylvania.

The economy is partly to blame for the decrease in health coverage for students. Operational shortfalls have resulted in tuition increases at many schools, leaving less money for parents and students to put toward coverage.

“Some students have to make the choice between health and school. Meal or education,” Poublon said. “[It's an] impossible choice to make.”