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After an investigation, New York Attorney General Andrew Cuomo believes that many providers of student health insurance are offering inferior coverage for higher rates. In effect, they receive far more in premiums than they pay out in claims.
College students have been a boon to health insurance companies: the typical student is their perfect customer–the young, healthy adult with no pre-existing conditions. Their policies are profitable, and help pay for other policyholders’ claims. Over half of America’s universities require their students to have health coverage for safety reasons, but some are able to negotiate better deals from insurers than others.
The issue is that there aren’t many of those sicker patients in the student pools, so the more expensive premiums are largely moot. Since students are looking for affordable health insurance, many colleges keep costs down by providing very little in benefits (despite state regulations meant to prevent that). Many plans don’t cover injuries sustained while intoxicated, an issue for many in this environment.