Insurers operating in New York could be facing a new competitor--universities. Gov. Andrew Cuomo has launched a new pilot program that allows colleges to directly insure their students.
Four universities (Columbia University, Cornell University, New York University and the University of Rochester) were selected to participate in the trial run. The schools were chosen because of their large student population and their financial security that enables them to cover inherent risks within the health insurance industry, Live Insurance News reported.
"This program makes it possible for a group of large universities to provide comprehensive health insurance to their students at a reasonable cost," Cuomo said in a statement. "Allowing the schools themselves to offer health plans lowers the cost, while ensuring that students get the health coverage they need."
If the pilot program is successful, New York officials may consider expanding the number of schools that can self-insure their students and help establish a new system for students' health insurance coverage, Workforce Management reported.
"Once we have experience with these large financially strong institutions, we can consider whether the model will work for other universities," New York's Department of Financial Management (DFS) Superintendent Benjamin Lawsky said.
DFS will regulate the universities' self-funded plans, which must maintain a minimum medical-loss ratio of 82 percent of premiums collected, according to the Long Island Business News.