After tuition, books, and room and board, colleges’ rising health fees hit a nerve

You've compared tuition. Reviewed on-campus housing costs. Even digested student meal plan prices.

But have you thought about how much your son's or daughter's dream school will charge for health coverage?

You might be in for a shock.

Hawley Montgomery-Downs was thrilled when daughter Bryn Tronco earned a scholarship that pays half the $63,000 annual tuition at the University of Southern California. But just as school was starting in August, she was stunned to receive a bill from USC for $3,000 to cover both a student health insurance premium and a fee that allows students to access on-campus clinics and other services. At home in West Virginia, she had paid nothing for her daughter's health insurance, through the state's Children's Health Insurance Program, which serves lower- and middle-class families.

Montgomery-Downs, who lives in Morgantown, West Virginia, was especially upset that USC not only billed her for health insurance but a $1,050 annual health fee. "It would be nice for her to go to the student health center, but with buying insurance to go to a primary care provider, it feels like I am paying twice," she said.

Mandatory medical insurance and health service fees are common at colleges as a condition of enrollment, said Stephen Beckley, a Fort Collins, Colorado, health and benefits consultant to colleges. While the health fee can help reduce students' insurance premiums, parents may feel as though they are paying double. "That's a big conundrum for our field," he said.

For parents, these big payments might come as a surprise, making a barely affordable education feel even less so. After all, students can economize by choosing a skimpy meal plan and cooking their own dinners or buying used textbooks, but there is no way around the mandatory health fees.

The costs vary by school but often can amount to several thousand dollars a year — costs that health care advocates say should be carefully reviewed by parents and students to ensure they understand their options while also meeting university requirements.

Students can seek a waiver to university health insurance by showing they have their own insurance or are covered by their parent's insurance that meets specific university criteria. Schools typically want to see that a student's own insurance covers local doctors and hospitals for little out-of-pocket cost. Student health fees, however, generally can't be waived.

USC, a private college, charges $2,273 a year for its Aetna student health insurance plan. The average for public colleges is $2,712 and $3,540 at private universities, according to a 2022 survey by Beckley's firm, Hodgkins Beckley & Lyon.

Other prominent colleges charge much more, such as $6,768 at Stanford and $4,163 at Dartmouth College.

The University of Montana charges $4,700, and most services at its school health clinic are fully covered by its health plan. The University of Colorado charges $3,976.

At Harvard, students buying the school's insurance pay $4,080 annually and $1,304 for the student health fee.

The easiest solution to avoid these charges would be for students to stay on a parent's health policy — which the Affordable Care Act allows until they turn 26. But that works only if the student's parent has a policy that meets the school's comprehensive requirements and offers in-network coverage where the college is located.

Otherwise, parents may want to shop among ACA marketplace plans to see if they can find a bargain. If their incomes are low enough, students can sometimes enroll in Medicaid or a CHIP plan in states where they go to school. But this strategy has limitations as well. Students must meet state residency requirements where they go to school, and parents cannot claim them as a dependent on tax returns. CHIP coverage also expires once a student turns 19.

Schools that charge a student health fee and require insurance coverage say the funding helps cover services at campus health clinics, which otherwise would cost students hundreds of dollars a year or more.

The USC student health fee — which covers primary and preventive health services — also helps the school pay for services not typically covered by insurance, such as monitoring disease outbreaks on campus.

Dr. Sarah Van Orman, chief health officer of USC Student Health, noted that the student health fee provides funding for additional mental health providers on campus and a team focused on sexual assault prevention and education — services available to students without any copayments. She said these additions are vital because, even with insurance, students could face challenges finding private counselors to provide timely help and, if they do, students would have cost-sharing expenses.

"The student health fee supports our public health infrastructure on campus," Van Orman said.

Because students can get primary health services on campus at the student health center, fewer of them seek care paid for by the insurance, she said, and that helps keep the monthly premium on the Aetna student health insurance plan lower. "These things are working together and are not at all duplicative," Van Orman said.

USC's student health insurance has an in-network annual deductible of $450 and a $20 copay for physician office visits. It also provides comprehensive services nationwide, so students are covered when at school and back at home — even if that's across the country. About half the USC students buy the Aetna student insurance, according to Van Orman.

Other colleges have a different strategy. For instance, George Washington University's mandatory health insurance covers health center services on campus. Unless they get a waiver, undergraduates must enroll in the student health insurance plan — costing $2,700 a year — unless they prove they have another insurance plan that meets the school's criteria. The health plan premium allows students to get many free services at the student health center, including medical office visits, some prescriptions, and routine screenings for sexually transmitted infections.

Beckley said college rules vary on whether they allow students to choose insurance plans other than what the school offers.

USC allows students to buy an alternative insurance policy through their parents' plan or on the ACA marketplace as long as it meets the school's requirements that include comprehensive health coverage in the Los Angeles area and covering preventive care with zero cost sharing. Out-of-state Medicaid or CHIP plans don't meet the university's criteria because they don't have provider networks for routine care in California.

That was unwelcome news to Montgomery-Downs.

"This is not something we budgeted for," she said of USC's health costs.

Montgomery-Downs, a former associate professor at West Virginia University who now works as a freelance editor, said she wasn't sure what to do when she got the USC health bill. She had thought Bryn, who turned 19 last week, would be covered initially because her CHIP plan provided coverage for treatment at emergency rooms and urgent care centers out of state. And Montgomery-Downs wanted to make sure her daughter had health coverage on summer and holiday breaks when home.

Unsure of which marketplace coverage options would meet the school's rules and deadlines, she decided to go with the Aetna student plan USC offered.

A look at marketplace options on Covered California shows the $2,200 for the USC Aetna student plan is a competitive rate. The lowest-priced comparable PPO plan offered by California Blue Cross that would provide Bryn a national network of providers costs about $2,400 a year factoring in a government subsidy based on their family income. PPOs provide some coverage for out-of-network doctors and hospitals.

Montgomery-Downs gets her coverage on the marketplace and said she will shop for a marketplace plan for Bryn for the next school year. She said she wishes they had been aware of all the health costs at the time of admission rather than just before classes began.

"It’s all nightmarish, even for someone with the privilege of time and some understanding of these bureaucracies — higher education and medical insurance," Montgomery-Downs said.