Insurance Switch

Improvements Seen In Rutgers Student Insurance After Changing to Aetna

By: Aleksandra Nadolski, Observer Contributor

Posted: 11/4/08

Luz Costa, found herself facing thousands of dollars in medical bills after she was admitted to Saint Michaels in 2006.

Costa, a junior at Rutgers-Newark, who was told she would be covered by student insurance, explained how she had to pay 400 dollars in doctors' fees for just one visit. "I couldn't afford some of the other ones," she elaborates on the damage of the unpaid bills. "Some were sent to a collection agency and went against my credit."

The student insurance in question was called Mega Life and Health Insurance Company. Students like Costa, who relied on services outside Rutgers Health Center, were left with unpaid bills or a partial balance.

Costa explains, "I called the Student Insurance in New Brunswick and they said I had to put in a claims form at the R-N clerk, so I went there and filled out all the paper work and I faxed it to them. At the end they covered some of the hospital bills but they refused to cover the doctors' fees and a percentage of the overall hospital fees."

Rutgers University has since changed its medical coverage to The Chickering Group of Aetna insurance, which came into effect in September 2007. Betty Peters, coordinator of Student Insurance at Rutgers University, explains partial reasons for the switch were the difficulty with the claims system at Mega Life. "Mega Life used Beeach Street network and when they paid a fee, it was a negotiated fee. The provider wouldn't necessarily accept it as payment in full, where with Aetna they do," explains Peters of the process.

The new plan with Aetna was also more cost efficient for students. James Reeling, director of Risk Management and Insurance at Rutgers University, elaborates on the new contract. "The approximate cost of the basic plan is," he says, "if you take 38,000 students and multiply that by the cost of insurance per student, the approximate premium for full time students is just under 3.3 million dollars."

Reeling says that in comparison to the contract with Mega Life, Aetna is around $700,000 cheaper for the University.

The current plan in called Health Services Plus, and is the basic plan which is offered to all full time students. The Health Services Plus benefits include lab tests, referrals to other doctors as well as ER visits, up to $5,000 per year. Aetna offers additional insurance coverage at reasonable costs for up to $250,000.

All full-time students are charged for the insurance fee on their term bill, but can decline the fee if they have alternate insurance. The cost of the basic student insurance plan per semester is around $140. The insurance plan is also offered to part-time students.

Aetna however may have flaws as well. They are a type of Preferred Provider Organization insurance, which means that they pay participating in-network providers' fees in full. Reeding says that, "if it is out-of network they will pay a 100% of reasonable and customary charges," which sometimes will not be the full amount of the bill. Reasonable and customary charges are determined by zip codes, where doctors in New York will probably be paid more because of their higher costs, and doctors in rural Pennsylvania, for example, will be paid out less due to cheaper doctors.

This does not cause too much trouble for Rutgers students as most of the providers near Rutgers campuses participate with Aetna.

Costa recaps an experience at Saint Michael's Hospital under Aetna's plan. "I wanted to get into the hospital last May and all the hospital fees and doctors' fees were covered and I was never bothered about those."

Before the switch to Aetna, some unpaid bills were still left behind. Peters clarifies that, "With Saint Michaels what we were able to do in those situations, we worked with them and they were able to write the balance off. The thing is now it's simplified because they (Saint Michaels) do participate with Aetna and they accept the payment with Aetna as paid in full. So we do not have all that chasing around."

When asked about the performance of Aetna insurance coming into the second year of coverage Reeling responded, "I think they have been working very hard to meet our needs, but we do periodically review their performance and we work to improve the product and the service, so I think that they are doing a good job, so far. I think they can do better; there are some areas they can improve."