Sometimes you just have to shake your head — the more things change, the more they stay the same.
It can really be depressing to see how, 3 years after the federal mental health parity act was passed, the company known primarily for underwriting students loans — Sallie Mae — is discriminating against people with a mental illness.
It’s doing so through one of its myriad of products called tuition refund insurance, something that allows you to reclaim up to 100 percent of your tuition if an illness strikes you while you’re in school. But not just any illness — it has to be a physical illness. If a mental illness strikes you, you will only get 75 percent of your tuition returned.
There’s a silver lining on this cloud… suggesting change may be forthcoming. So here’s a blog entry to help push that change through.
After The New York Times’ reporter Ron Lieber began investigating the blatant discrimination against people with a mental disorder diagnosis, Sallie Mae’s tune suddenly changed for the free tuition refund coverage (which only offers a refund up to $5,000):
As for Sallie Mae, its public relations staff phoned me Friday morning after our long chat about its policy Thursday to let me know that it had gone back to Markel and ordered up 100 percent coverage for mental health-related withdrawals for borrowers who get the free $5,000 in coverage. “And we’re committed to getting to 100 percent coverage nationwide at an affordable cost because we’re committed to responsible personal finance,” said Martha Holler, a company spokeswoman.
Wow, amazing. Suddenly they realize the benefits of equal coverage for any illness, once the media spotlight is shown on their prejudicial and discriminatory practices! Imagine that.
But before the silver lining appeared, reactions from the companies were very different. Sallie Mae offers the plans, but so do private insurance companies like Dewar and Markel. Markel offers plans that they market directly to students, and in those plans the coverage is equal. But Sallie Mae uses Markel as its underwriter, and provides a a tuition refund plan that offers discriminatory coverage. There’s little logical explanation the companies could offer for this prejudicial practice:
Sallie Mae, however, chose to adopt the disparate treatment approach even though it’s using Markel as its underwriter. According to John Fees, president of the Sallie partner Next Generation [who offers the insurance], it had no choice if it wanted to offer affordable premiums to everyone in the United States and do away with any mental illness hospitalization requirement.
How much more would it have cost to offer equal coverage? “I’m not at liberty to say that at this point,” he said. “It’s a confidential business relationship with Markel.”
Mr. Fees seemed a bit miffed by my suggestion that his policy might be discriminatory on its face. “I live with a clinical psychologist, and I had this conversation with her,” he said. “The aim is never to discriminate against anyone.”
When I asked Dana Tufts, Dewar’s president, about the potential for discrimination, his public relations representative, Carmen Duarte, interrupted and refused to let him answer.
Beautiful response there, Dana Tufts. What, you can’t even answer for your own company?
And John Fees should be equally ashamed when he suggests that cost differences somehow justifies the discrimination. Hey Mr. Fees, you do know the cost of labor went up when we actually had to start paying people a minimum wage, but it ended the centuries-old practice of discrimination against classes of people who had little clout or power, right?
Equality may be more expensive (you just don’t know until you have the research to show us one way or the other — and if you have such research, please do share!), but it’s no justification for discrimination. It’s a morally bankrupt argument.
It’s easy to imagine the worse case scenario, too, given the popular diagnosis of things like attention deficit disorder in college students. A student finds out they have cancer, needs to drop out for the semester, and so has to take advantage of the tuition refund insurance. But Sallie Mae discovers the student also has a diagnosis of attention deficit disorder, and so only refunds 75 percent of their tuition — what’s to stop them?
There’s something you can do about this, if you’re a student or parent of a student — complain to your school about this discriminatory practice (even if you aren’t going to purchase the insurance, and even if your own child doesn’t have an active illness of any kind):
If you refuse on principle to buy into a system that treats mental illness differently from physical injury, complain to your school, since it often sets the terms of the policy in conjunction with the insurer. “I would challenge any college or university in 2011 that agrees to become party to the selling of tuition reimbursement policies that discriminate against mental health, and say that it’s time for that community to stand tall and step in and not accept this,” said Mr. Libertoff, the Vermont activist.
We’ve come a long way from discriminating against people just because of the illness they bear. Let’s ensure Sallie Mae ends this prejudicial inequality and sees the error of offering a benefit that discriminates against a student simply because they have depression, anxiety or attention deficit hyperactivity disorder.
Read the full article: A Tuition Refund Policy That Pays Less for Mental Illness
9 comments
Thanks for this illuminating blog post. I had no idea discrimination like this was going on.
When I read the article about Sallie Mae’s practices in the NY times it made me so mad. As someone who ended up in the hospital during my undergrad years, but luckily did not have to drop my semester, this type of discrimination makes me sick. Though it is not surprising that the schools do not force Sallie Mae and others to have nondiscriminatory practices since they often allow their student health insurance to discriminate. My current student health insurance only covers $800/year combined for mental health treatment and psychiatric medication. While you can have unlimited medication for other disorders. You can buy extra insurance if you want to, but there is a clause that says it specifically can’t be used for mental health treatment. If they wont provide fair health coverage for students who are attending their school, why would they want to provide fair treatment for those who have to drop out. For those of you who say that this should not happen because of the new parity law, most student health insurances are not group policies, but individual ones so they are under no obligation to provide parity for their students.
The Markel policy doesn’t necessarily violate the MHPA because of the increased cost exemption in the MHPA.
Assuming that parity between physical and mental illness is a goal, how exactly would an insurer or school control for withdrawal due to interpersonal problems with roommates, homesickness, etc.
Clearly one visit with a mental health professional should not automatically trigger a cause for withdrawal any more than a broken leg would automatically qualify as a presumptive disability.
Would it be OK to require either a minimum number of days of treatment and or a clearly defined set of diagnosis’ that would be considered “ disabling “
A diagnosis is a diagnosis… So if a student is diagnosed with a mental disorder by a mental health professional, it qualifies them for the insurance (assuming all the other qualifications for the insurance are met).
would homesickness or adjustment disorders with a roomate qualify one for benefits assuming there were no other qualificaation or restrictions to receive the benefits ?
If so, doesn’t both the school and the parents bear so responsibility for encouraging the student to use this as a life lesson rather than take the easier and less profiund route of dealing with the problem in a meaningful way
I find this article interesting, as not only do I have a college-aged son with OCD, I am also a financial aid professional. In my experience with financial aid offices, they often request more documentation to verify mental health diagnoses than they do for physical health issues. I don’t have experience with the Sallie Mae insurance you write about; I am talking about the institutions own policies on refunds, remaining in good academic standing, etc. I know there are administrators who feel that there are kids who “fake” depression, etc, just so they can leave school in good standing and get their money back. The fact of the matter is that many mental health issues first manifest themselves during the college years, and these illnesses can be, at the very least, just as debilitating as physical illness. What is happening is obvious discrimination to me.
So how would one provide a meaningful benefit at a fair price if the insurance company needed to include the same benefits for a case of home sickness or roommate problems as compared to a student who truly had serious emotional problems?
Covering all “mental†conditions regardless of severity would make the cost prohibitive and therefore make the benefit out of reach for those who would be potential claimants?
As an underwriter, I’m open to suggestions for a product that is in the public interest and that would provide a reasonable benefit for a reasonable price?
Dear Dr Grohol,
Thank you for this article because I had no idea this was occuring.
Would you please also address the fact that occupational long term disability is limited to 24 months across this country just because one has a mental health diagnosis? Companies and businesses are discriminating against mental illness and profiting from it. And the result to some is bankruptcy, loss of home or suicide.
This discrimination occurs even though the mental health parity law was approved in 2006, it did not reach as far as disability policies.
Please share this with your readers. Thank you.
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