Why do international undergraduates pay over $1000 more for student health insurance?

Getty+Images
Back to Article
Back to Article

Why do international undergraduates pay over $1000 more for student health insurance?

Getty Images

Getty Images

Getty Images

Getty Images

Sarah Friedman, Senior Writer

In August, the Hustler received an email from Mianmian Fei, a student from Guangzhou, China, saying she wanted to raise awareness about the increased costs of the student health insurance plan for international students. While the costs for international students have been higher than those for domestic students for several years, they have always flown under the radar. To avoid the higher prices, many students waive the student health insurance plan to use their parents’ insurance or a cheaper private plan.

What is the student insurance plan?

Virtually every college and university in the U.S. offers student health insurance plans, said Associate Dean of Students Pat Helland.

“The rationale behind why we have student health insurance is that we don’t want students to be burdened by medical expenses,” Helland said. “If you look at people who go bankrupt, oftentimes it’s because they have medical expenses they couldn’t afford. Health costs have always been really high, and all the time they are getting higher.”

Graduate and undergraduate students are required to be covered by the student health insurance plan unless they waive it by proving that they are covered independently or as a dependent on their parents’ insurance plan that has coverage comparable to the Vanderbilt plan.

The Vanderbilt insurance plan is considered a platinum insurance plan, the highest designation. It is offered by Gallagher Student Insurance and is underwritten by UnitedHealthcare, one of the biggest insurance companies nationwide.

In 2015-16, 1,410 domestic undergraduates out of 6,384 (around 22 percent) were covered by the student insurance plan, compared to 1,117 international students out of around 1,540 (nearly 73 percent), combined graduate and undergraduates.

 [visualizer id=”1015″]  [visualizer id=”994″] 

Of the 27 percent of international students who waive their insurance, many of them use one private plan that has been successful in the past. However, this year, the waiver was rejected for many students, which is what prompted international students to begin to question the higher insurance rate.

“They gave very different reasons to everyone who applied for a waiver,” said Natalie Xia, an international student from Shenzhen, China.

Several of Xia’s friends were among those whose insurance waivers got rejected, so she decided to take up the cause of investigating the varying rates. She has met with several administrators about the issue as part of her investigation, including Helland and Kristina Miller, the insurance liaison at the Student Health Center.

“I did research on campus over the summer and a lot of my friends were talking to me about their experience,” Xia said. “At first, I was just helping them call Kristina for more details, but then I just got into it after that.”

As a result of Xia’s efforts and Helland’s help, the waiver eventually got approved for the students who had purchased it. However, Xia is not ready to lay the issue to rest. She wants to find out why undergraduate international students get charged higher rates, and her goal is for the rate to be brought down to be the same as that of domestic undergraduates.

Why do international students get charged higher rates?

There are two pools of students for insurance purposes: domestic undergraduate students in one, and international undergraduate students and all graduate students in another. The first pool pays around $1,800 annually for insurance, while the second pays around $3,000 — around $1,200 more.

Insurance rates are determined by underwriters, who analyze both historical health risks of certain groups of people and reviews those groups’ claim history, said Dr. Louise Hanson, Director of Internal Medicine at the Student Health Center. For example, men get charged higher car insurance rates than women because they have historically been involved in more car accidents.

Graduate students pay more for insurance because they are at a stage in their lives in which they tend to need more advanced care, such as possible prenatal care. According to Hanson, international students pay more because they have demonstrated higher need for care in the past.

“International students come from all over the world, and many of these students from developing nations have significantly higher health care needs, such as immunization catch-up, preventive health care and chronic health conditions,” Hanson said.

Xia pointed out that because international students come from all over the world, it is unfair for them to all be grouped in the same insurance plan, as not all countries represented are developing. Some have healthcare that is comparable or even better than that of the U.S. Xia met with several administrators involved in determining the insurance rates, leading to frustration and misunderstanding.

“They group all the international students together,” Xia said. “But all the examples they gave me were about graduate students. I think there’s a type of visa for family members to come with the graduate student, and sometimes their wives get pregnant and use student health resources. But all international undergraduate students are very healthy and they don’t have any family members coming with them. Most of them don’t have dependents.”

How does financial aid come into play?

Because Vanderbilt uses a need-aware admissions process for international students, many of them do not receive university financial aid, said Brent Tener, Director of Student Financial Aid and Scholarships. There are, however, a number of “needy” international students brought in each year, he said.

Natalie Xia, an international student from Shenzhen, China, is advocating for equal insurance rates for international students. (photo courtesy Natalie Xia)

Natalie Xia, an international student from Shenzhen, China, is advocating for equal insurance rates for international students. (photo courtesy Natalie Xia)

Health insurance provides an unforeseen cost for students because it is an upfront cost at the beginning of the year, not divided between two semesters. For the students who are covered by financial aid, a frequent solution for this cost is transferring some of the money allotted to their second semester to their first semester aid package. For students without financial aid, however, there is nothing that the financial aid office can do about the insurance costs.

The university releases an estimated cost of attendance each year, but the higher insurance rate for international students is not included in this cost, making it a surprise for many international students. The only difference in the cost of attendance for international students is a higher travel allowance. Additionally, because the insurance plan is not always finalized when the cost of attendance is computed, the financial aid office doesn’t always know the exact cost to add in, Tener said.

Is this the case at other schools?

According to Hanson, insurance costs are difficult to compare across colleges and universities because they frequently take different forms. Some schools charge every student a mandatory health fee whether they waive insurance or not, and this fee is used to support the student health center. As a result, the insurance rates at these schools are lower, but each student is paying another cost elsewhere. The student health centers at these schools typically offer more resources, so that they don’t have to make as many outside referrals, which keeps costs of insurance plans down.

Additionally, some schools, such as Washington University in St. Louis, require 100 percent of students to be on the student health insurance plan.

However, Xia researched the insurance rates at the other U.S. News and World Report top 30 schools, and found that Vanderbilt is the only school on the list that charges international undergraduates a higher rate than domestic undergraduates. Rice University offers international students a cheaper rate.

Is this system going to change?

Administrators across campus are working with international students to try to resolve the confusion for next year.

According to Hanson, Vanderbilt continues to look at student health insurance rates, and it is likely that the plan will be different for next year.

“There are several potential changes on the table, but one possible change is that there will be one plan—for all students—not divided by grad, undergrad, professional, international,” she said.

However, Hanson emphasized that the decision is not entirely in Vanderbilt’s hands.

“These aren’t decisions that are Vanderbilt-specific,” she added. “Certainly Vanderbilt has some discretion about what kind of plan we want, but the part about what the rates are is really a purely business decision of these people called underwriters, people who study risks of populations.”

Tener said that the financial aid office is also working to communicate insurance costs more clearly so that they can plan appropriately.

“Can we do a better job communicating? No matter how well you communicate, we can always do a better job, because we want to be transparent with students and we try our best to make sure everyone understands what our costs are,” Tener said. “We do not want any surprises.”

Xia is doubtful as to whether the concern will be addressed, but doesn’t plan on giving up her efforts any time soon.

“The opinion from the dean was that the school didn’t make any mistakes, the school was right for charging international students higher rates than domestic undergraduates,” Xia said. “My main concern is that the school still thinks they’re right and that they’re never going to change it.”

Hang on for a minute...we're trying to find some more stories you might like.


Email This Story