Athletic directors across the NCAA are looking into new health insurance options. (USATSI)
Athletic directors across the NCAA are looking into new health insurance options. (USATSI)

Many NCAA athletic directors are exploring the idea of pooling their school's athletes together in order to purchase cheaper health insurance that could provide better and longer-term medical coverage for players. If the plan goes through, this would be the first comprehensive medical insurance model in college sports instead of a piece-meal approach handled individually by states, conferences and universities.

The idea is for the Division 1A Athletic Directors’ Association to use its collective purchasing power to reduce insurance costs. The company leading the plan estimates that $282 million could be saved and coverage for all college athletes would extend until they are 26 years old.

Critics of college sports’ current health insurance model complain that it’s inefficient, contains costly gaps in coverage for the NCAA and its members, and creates policies that don’t guarantee equal coverage for athletes across all conferences and schools. The NCAA requires that athletes have insurance paid for by the school, the athlete or his or her family. The insurance must cover up to the $90,000 deductible of the NCAA catastrophic injury program.

Over the last two years, a model called the "Student Athletes' Enhanced Benefits Plan" has been designed. It's being led by former Republican Congressman and Oklahoma football player J.C. Watts, who has teamed with Marsh, an insurance brokerage and risk management company. The athletic directors’ association said it’s currently trying to finalize a contract with Marsh. Three webinars have been held for more than 240 Division I schools through Watts Partners, the lobbying group run by the former Sooners quarterback.

“One of the things that’s so apparent when looking at college sports is they compete on the field but there’s not a lot of cooperation and coordination off the field,” said Tom McMillen, president of the athletic director's association and a former Maryland basketball player, 11-year NBA pro and Democratic Congressman. “That’s so different than the NFL and NBA, who have business operations so coordinated that there’s opportunities for cost savings and efficiencies.

“If you bundle up insurance and do it nationally and cut out the excesses in the system, just logically you say you can save considerable dollars. There’s a lot of hurdles to jump through. Every state is a little different, every school is a little different, but it makes a lot of sense.”

The plan, which could be up for enrollment in August, would be available to all three NCAA divisions. Based on Marsh’s projections, if 100,000 Division I athletes were pooled together to buy medical coverage and other benefits, the cost per athlete would drop from $12,250 to $9,430. Those figures are estimates and based on comparing selected Division I schools’ insurance costs.

Among the proposed coverage provisions through the benefits plan:

• Ensure no out-of-pocket expenses for players and their family for injuries that occurred while participating in college sports. Schools often pay a lot of these costs but there are no requirements and some athletes get saddled with thousands of dollars in medical bills from injuries sustained in college.

• Provide health coverage to former athletes related to college sports injuries. The coverage would extend to the age of 26, which would be consistent with the current Affordable Care Act requirements.

• Serve as the athlete’s primary medical coverage during college eligibility.

• Lower the cost of comprehensive basic injury, dental, vision and catastrophic healthcare coverage.

• Protect athletes from substantial and unexpected medical expenses and help a university’s ability to respond in those cases.

• Add additional support to athletes through family travel benefits, financial literacy and career counseling programs, lifetime scholarships, and compatible cost of attendance stipends.

Confusion with current health insurance

Because of the Affordable Care Act, developers of the athlete benefits plan believe college sports can essentially create a new exchange group to evaluate risk and insurance ratings differently. If all 465,000 NCAA athletes went to the insurance market together, they would be the eighth-largest marketplace behind only the states of California, Florida, Georgia, Massachusetts, North Carolina, New York and Texas.

“Right now, a 325-pound defensive tackle is getting compared to a 140-pound kid flipping burgers at McDonald’s,” said Steve Pruitt, managing partner of Watts Partners and a former Ohio State football player. “However, the athlete gets injured less than the kid working at McDonald’s, but the injuries for the kid at McDonald's are not as catastrophic. It’s a very different risk pool.”

For months, organizers of the athlete benefits plan have tried to compile data on how medical claims histories for athletes work across college sports. What they say they've found is an enormously complex and inefficient approach. Sometimes, only paper files of medical claims are available from universities instead of a streamlined online model.

“Right now we’re kind of in the pre-historic age,” McMillen said. “There are very few health care systems where the athlete picks the doctor. It’s the school doing that. The claims are often filed very differently from school to school. There’s no collective records. Unless you do a survey, it’s very hard to determine whether the premiums you’re paying even make sense. There is no metrics to measure any of this by.”

Pruitt described the current model as “accounting roulette” because of so many uncertain costs. Generally, an athletic department’s health insurance is the secondary payer after an athlete’s family plan, Pruitt said, but there are hidden costs that are difficult to track.

For instance, if an athlete gets sent to a university medical hospital for care, who pays? Usually, the bill goes to the university and there’s a transfer cost, which doesn’t come out of the athletic department budget so it’s not reported, Pruitt explained.

“When you start tearing this picture apart and you see how scattered all of this is, it really comes down to two fundamental questions,” Pruitt began. “How much are they really paying that they don’t know they’re paying, and is there a way they can establish those expenses are accounted for as a way for efficiency and transparency?”

Watts, who was a Congressman in Oklahoma from 1995 to 2003, said the ongoing unrest in college sports is a big reason to create the benefits plan. That includes the Ed O’Bannon lawsuit against the NCAA that wants to allow football and men’s basketball players to be paid for use of their names, images and likenesses.

“I’m not one that says you should pay a player to play college football, but I don’t think a college athlete should have to pay to attend the University of Oklahoma when you don’t have the type of benefits these players should have,” Watts said. “And it’s not just the time they’re at Oklahoma but after they’ve left. Stadiums have gotten bigger [and] weight rooms have gotten bigger [while] the benefits have largely stayed the same.”

Pruitt was previously the staff director of the U.S. House of Representatives’ budget committee. He arrived in Washington, D.C., 42 years ago as a lobbyist for the AFL-CIO, the national trade union center. Pruitt said medical claims are so confusing in college sports that even if athletes were somehow legally permitted to collectively bargain with schools, “it would be damn near impossible to figure out what’s being spent on anything. You couldn’t go through bargaining positions that make sense.”

The benefits plan is based on a trust structure that allows it to be self-funded, which Watts Partners says gives the trust the ability to operate without facing costly regulation from the 50 state insurance commissions. The idea is the benefits plan will drive better rebates from premiums, which generates money going back into the plan.

The plan also proposes a minimum $3,000 cost of attendance stipend for all college athletes with the ability for schools to pay more if they want. In 2015-16, the NCAA began allowing payments to players for cost of attendance -- a number that varies by school and is supposed to reflect the actual cost of attending college.

Because of court rulings, so far the NCAA has allowed schools to decide not only if they will pay the stipend but to whom they will pay it and how much they will pay based on numbers derived from financial aid offices. Pruitt said only “a handful” of universities are paying cost of attendance across the board to all athletes.

“Most of them have couched it as we start with football, men’s basketball and women’s basketball, and they believe that helps their Title IX issues,” Pruitt said. “They’re basically walking into a whole other wave of lawsuits. Our plan just says pay everybody the same thing as a base benefit, and if you want to provide more, pay them more.”

Watts Partners would be compensated if the benefits plan becomes reality and would continue to market it. Pruitt said the company’s fee amount isn’t known yet since negotiations are ongoing.

ADs and the private sector take the lead on insurance

The issue of better health insurance for college athletes isn’t a new one. But until now, college sports hasn't collectively tried to tackle the topic.

In 2012, the state of California passed a law requiring colleges to provide medical care or insurance for sports-related injuries for up to two years after an athlete leaves a university. The city of Boston has considered passing a law requiring its universities to provide comprehensive health insurance and long-term medical expenses for college sports injuries.

Last year, the Pac-12 became the first conference to direct schools to pay post-college medical costs for sports-related injuries. Pac-12 schools must provide medical expenses for at least four years following the athlete’s graduation or separation from the university, or until the player turns 26.

Sen. Cory Booker (D-N.J.), a former Stanford football player, argued at a Senate hearing in July 2014 that NCAA athletes are exploited when they have to pay for their post-career surgeries. NCAA president Mark Emmert testified at the hearing that insurance for athletes is “much better” than people think but acknowledged some areas need to be improved.

“It’s costing some athletes thousands of dollars into their lifetime,” Booker said.

“Yes,” Emmert replied.

When the Power Five conferences gained new legislative power at the 2015 NCAA convention, they laid out several priorities to adopt in the next two years. One of those goals was improving medical support/insurance for athletes and updating policies if needed for appropriate care.

Where the NCAA stands on the “Student Athletes’ Enhanced Benefits Plan” is unclear and a frustrating issue for Watts Partners. Watts and Pruitt said they met in October 2014 with NCAA chief legal officer Donald Remy, NCAA chief medical officer Brian Hainline and NCAA director of travel and insurance Juanita Sheely to lay out the idea.

“Our basic response from them was, 'Go build it and come back to us,'” Watts said. “They’ve been lukewarm at best. Tom really is the one that has turbo-charged it in the last six months because of his credibility and access to the ADs and conference commissioners. It doesn’t hurt having a Rhodes Scholar trumpeting your plan."

The NCAA declined comment regarding the benefits plan being considered by athletic directors. Last year, Sheely defended the NCAA's insurance coverage for athletes in this online article.

Earlier this year, the NCAA sent out a medical insurance survey to its members. The survey was described internally by the NCAA as a starting point to examine where coverage gaps exist before moving forward.

“We’re two years ahead of them and have done the kind of analysis that even their survey will not pick up the data for,” Pruitt said. “Their survey is mostly a cost accounting survey than it is looking at the actual benefits and policies that the schools require and how those interface with what the NCAA offers. We’ve already done all that.”

Some NCAA officials have privately expressed concern that the Watts Partner plan overlaps with what’s already being provided to athletes. Purdue athletic director Morgan Burke tried to temper those worries in a March 20, 2016, e-mail to NCAA chief financial officer Kathleen McNeely.

“I do not feel there is an attempt to duplicate at all,” wrote Burke, a past president of the athletic directors’ association. “The people doing the work said they had tried to reach out to the NCAA -- not sure how long ago -- and did not get anywhere. To be successful, this effort, which appears promising, would require that the NCAA endorse and perhaps it uses current funds to help buy the base coverage for all schools from which schools could then add additional coverage? Not sure the math would work but it might and it would be consistent with the health and safety challenges.”

The NCAA pays for the current $13.5 million premium for catastrophic insurance, such as if an athlete becomes disabled while practicing or playing. An athlete does not need to be permanently injured to receive benefits. About 20 athletes have gotten paid from this benefit, which kicks in once an athlete’s medical bills exceed $90,000, according to the NCAA website.

Organizers of the proposed benefits plan say the costs of NCAA and individual school insurance premiums have increased annually at rates equal or higher than those in the general health and accident market. They say the NCAA uses four carriers to deliver insurance benefits that have different requirements and occur without NCAA top-level coordination.

The NCAA layers one policy on top of existing coverage in order to respond to complaints about the gaps in coverage, Pruitt said. That leaves many athletes confused about who is supposed to pay for bills, though the NCAA has tried to offer better communication in recent years.

Schools often do cover an athlete’s medical expenses, sometimes both during and after their eligibility. But there is no requirement for the school to pay and it doesn’t always happen. The great unknown is how many ex-athletes are footing bills to treat significant injuries sustained in college. Stories periodically become public of ex-college athletes paying for medical bills they didn’t expect to pay.

Some athletic directors are just starting to pay more attention to the benefits plan, which also has support from the insurance agency run by ex-Michigan AD Tom Goss. One athletic director at a Power Five conference said he had not heard of the plan. Some who have heard about it are interested.

“For group health insurance, why not use our buying power and use the numbers?” Penn State AD Sandy Barbour said. “We’ll see. Institutions are typically pretty risk-adverse places so whether a campus would allow us to step out and go together with 125 other institutions to drive our medical insurance rates down, I don’t know. But it’s certainly something we’re all looking into. Tom McMillen has been terrific.”

Organizers of the benefits plan are selling concussions as a reason to pool athletes together for insurance. The NCAA is currently trying to complete a concussion settlement that would pay $70 million for current and former athletes to be tested for brain trauma, but not pay for their medical costs. Individual schools could soon be sued in class actions over how they managed concussions.

Last month, a Maryland judge ruled the NCAA must go to trial in the death of a Frostburg State football player after he sustained head injuries. The judge determined the NCAA has a “special relationship” to protect athletes since that’s its mission statement.

“To think the NCAA is going to get by with $70 million when others, like the NFL, are on the hook for more for their players, that’s dreaming,” Pruitt said. “When you talk to athletic directors across the country, they agree we’ve got to stop dreaming [about] this stuff. It’s only going to get worse as you see medical advancements. We’re almost to the point where blood tests will diagnose CTE (a brain disease connected to repeated head trauma).”

NCAA officials have attended recent webinars to learn about the benefits plan. Watts and McMillen said the NCAA has been updated throughout the process.

“We want to be collaborative with them on it,” McMillen said. “Obviously, the NCAA is a major player and there will have to be discussions there.”

Follow and read more from Jon Solomon on Facebook and Twitter.