IN THE PUBLIC EYE

Student Accident Insurance: Effective Risk Management Tool & Pre-Pandemic Facts to Ponder

Author: Alliant

Every single activity that happens within an educational institution creates risk! A large percentage of each student’s life involves school activities, and every activity comes with risks. Some are easily recognizable, most notably organized and competitive sports (athletics), but others are often overlooked:

Physical education classes
Club Sports (i.e., Ski Club)
Career – vocation/technical education (e.g., EMT, Culinary, Automotive)
Commute between classes (off campus)

The safety and well-being of students is of critical importance and even so, accidents happen, and medical treatment can be costly. In the U.S., about 30 million children, adolescents and young adults participate in some form of organized sports, and more than 3.5 million injuries occur each year are experienced by the participants. Almost one-third of all injuries incurred in childhood are sports-related injuries. By far the most common injuries are sprains and strains. Obviously, some sports are more dangerous than others. For example, contact sports such as football can result in a higher number of injuries than a noncontact sport such as swimming. However, all types of sports have a potential for injury, whether from the trauma of contact with other players or from overuse or misuse of a body part.

Additionally, COVID-19 upended classrooms and campuses across the country at the same time as the pandemic’s devastating effects were being felt in our nation’s economy and loss of life. In response, educators, staff, and school leaders at all educational levels and in all parts of the country have made extraordinary commitments and dedicated their talents, energy and resources to address the needs of students and families in their communities. Still, COVID-19’s impact can be witnessed in the magnification of longstanding challenges for students including things like a possible increased need for medical care, no access to medical care due to job loss related to the pandemic and overall health deconditioning (physical and mental) due to remote learning and lack of activity.

The following sourced statistics are of great importance as they were derived before the COVID- 19 aftermath, supply chain snags, inflation surge, war in Ukraine, mental health crisis and the recessionary alarms stemming from the recent market activity. Please note that every one of these issues directly correlates to an increased need for proper coverage.

Myers-Stevens & Toohey claim data analyzed by actuaries at Chubb points to the average:

Football claims costs is three (3) times higher than all other sports combined, based on data from 2007 through 2020
Soccer claims costs have increased 132% from 2016-2017 policy year to 2019-2020 policy year
Diagnostic imaging costs (X-rays, CT scans, MRI’s, etc.) increased 42% from 2016-2017 policy year to 2019-2020 policy year
ACL surgery claims costs have increased 94% from 2015-2016 to 2019-2020 based on a running 3-year average: 58% of all sports injuries were knee injuries, based on data from 2007 through 2020
Durable medical equipment (DME) costs (wheelchairs, crutches, canes, etc.) increased 87% from 2016-2017 policy year to 2019-2020 policy year
6 out of 72 catastrophic football claims resulted in death or permanent injury. The average cost of these 6 large claims is $447,000, based on data from 2007 through 2020
Sports non-permanent injury claim costs increased 83% from 2015-2016 to 2019-2020 based on a running 3-year average

Additional statistics from Stanford Children’s Health, National SAFE KIDS Campaign, the American Academy of Pediatrics, and the Consumer Product Safety Commission ₁:

More than 3.5 million kids ages 14 and under receive medical treatment for sports injuries each year
62% of organized sports-related injuries occur during practice. However, 33% of parents do not have their children take the same safety precautions at practice that they would during a game
21% of all traumatic brain injuries among children in the United States are associated with participation in sports and recreational activities
Almost 1/3 of all injuries sustained during childhood are sports-related injuries but, as they age, their injuries tend to become more serious. According to the American Orthopedic Society for Sports Medicine (AOSSM), this is because on average, the rate and severity of injury increases with a child’s age due to the larger size, increased aggression, and a higher knowledge of the sport as the child grows older

The following statistics and trends pertaining to personal finance concerns in the U.S. were derived between 2017-2019:

78% of full-time workers said they live paycheck to paycheck. Of them, 56% said they were in over their heads and save $100 or less each month ₂
60% of Americans are unable to cover an unexpected $1,000 expense ₃
66.5% of all bankruptcies are tied to medical issues—higher than any other cause ₄
The number of debtors who cited medical issues as a contributing reason for their bankruptcy increased after the ACA’s implementation—67.5% in the three years following the law’s adoption versus 65.5% prior. The culprit for the lack of improvement was inadequate health-care insurance ₄
In 2019, the average single deductible has doubled in the past decade to $1,655 ₅
28% of all covered workers, including nearly half (45%) of those at small employers with fewer than 200 employees, have deductibles of at least $2,000, almost 4X the share who faced such deductibles in 2009. 13% now face deductibles of at least $3,000 ₅
Low-wage workers are impacted the most. Among firms that offer health benefits, 66% of workers at lower-wage firms are eligible for health benefits, compared to 81% eligible at other firms. Workers covered by lower-wage firms have an annual family contribution of $7,047, compared to $5,968 at other firms. One result of this is that fewer workers at lower-wage firms take up their employer’s health benefits when offered with a net effect of 33% workers at lower-wage firms are covered by their employer’s health benefits, compared to the 63% share at other offering firms ₅
In 2019 it was estimated that the total added costs to the U.S. healthcare system due to opioid overdoses are estimated to amount to $11.3 billion annually ₆

As is made clear by this data, the pandemic resulted in magnification of longstanding challenges and these impacts are impacting the student population today. A properly designed Student Accident Insurance Program can be one of the most effective risk management tools that an educational institution can utilize. Here are a few key benefits:

Allows access to activities for families with little or no other insurance (especially crucial for families who lost insurance in the pandemic)
Access to medical care/specialists
Excess coverage works to fill co-pays and deductibles for families with coverage and primary for those without medical coverage
Assist with rebound effect from the pandemic including:
- Surge in sports participation post pandemic
- Recommencement of travel, social and athletic activities
- Increased injuries due to deconditioning during remote learning
Reduction in total cost of risk – health & wellness and medical costs

Given all these items, it makes sense for education institutions to consider a Student Accident Insurance Program to not only protect the students, but let them and their families focus on their learning, growth and development.

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