U.S. News & World Report on June 13, 2012
By Kelsey Sheehy
Freshman orientations are underway at colleges across the country. Students are learning about meal plans, university housing, and course requirements for their majors. Many students will also learn about newly revamped student health insurance options.
More than 1 million students are enrolled in student health insurance plans offered by their college or university, according to the American Council on Education, a higher education organization. But student health plans offered through schools were not subject to the same standards as individual plans or those offered through employers, noted Aaron Smith, executive director of the advocacy group Young Invincibles, in a June statement.
“For years, the student health insurance market has been largely unregulated, and as a result, provided inconsistent value to students who actually do get sick,” Smith said.
The Affordable Care Act, which the Supreme Court upheld on June 28, now requires most student insurance plans to add prescription benefits, increase maximum coverage levels, and offer free preventative care.
“All of the same standards that will apply to the rest of the health insurance plans will apply to the college health plan,” says Tobin Van Ostern, policy manager for the progressive advocacy group Campus Progress.
[Find out what the healthcare law means for college students.]
The added benefits will come with a higher price tag for some students. At Towson University in Maryland, annual student premiums will increase from $1,414 to $1,590 starting in August, according to Jerry Thomas, associate director of the Dowell Health Center at Towson.
The premium increase covers added benefits such as free annual exams and breast exams for women and free STD testing for all students. It also covered raising maximum prescription drug coverage from $750 per year to $100,000 per year, and increasing annual coverage limits to $200,000.
Students could see more changes to the cost and coverage of their university-sponsored plans as more requirements of the healthcare law take effect between now and 2014, Thomas says. For example, schools have until 2014 to ramp up maximum annual benefits to $500,000, but must eliminate annual limits after January 2014. Accommodating those requirements could result in premium changes.
Not all college students will see their student health premiums increase this school year. At American University in Washington, D.C., and Mississippi State University, annual premiums for students will drop slightly. The lower cost came as a surprise to Robert Cadenhead, director of the Longest Student Health Center at Mississippi State.
“We were indeed concerned that pulling some of these caps and adding some of the benefits that’s required by the Affordable Care Act would raise costs,” Cadenhead says. “Interestingly enough … as our quotes came back, we actually came back about $50 lower on an annual basis.”
The lower premium is largely due to health-centered education campaigns informing students how to properly utilize student insurance plans and on-campus health centers, he says. Getting students to use the student health center instead of the emergency room helps the school control costs and keep the number of claims down, he adds.
High coverage levels and benefit changes made in anticipation of the healthcare law also played a role in preventing student premiums from jumping, says Daniel Bruey, director of the Student Health Center at American University.
“We were proactive in trying to make sure we didn’t have to add all of these at once, which would have resulted in a higher cost for students,” Bruey says.
American had already eliminated pre-existing condition clauses and ensured its plan’s minimum coverage levels met guidelines set by theAmerican College Health Association.
The updated guidelines put out by the ACHA, which counts more than 800 schools and 2,800 individuals as members, mirror those set out in the Affordable Care Act, says Jenny Haubenreiser, president of the ACHA and director of health promotion at Montana State University.
At American and Montana State, as well as at other schools, student health insurance is required for enrollment. Students under 26 years old who opt to stay on their parents’ plan, or have coverage through other means, can opt out of the school’s plan.
[Read why the student debt crisis needs a long-term solution.]
This requirement means insurance premiums are included in the total cost of enrollment and can impact financial aid awards. It also helps keep costs down, Haubenreiser says.
“In order to provide access to care for everyone … and to be able to manage the costs, everyone needs to be in that risk pool,” she says. “I think that’s a critical piece to the success of these plans.”
But schools with low-cost, low-coverage plans have a lot of ground to make up with the new healthcare requirements, and some opted to drop their student health coverage the upcoming school year as a result.
Lenoir-Rhyne University in North Carolina, Cornell College in Iowa,Bethany College in Kansas, and the University of Puget Sound in Washington state will no longer offer student health plans in the fall, according to a June article in the Wall Street Journal.
Bethany College’s plan cost students $455 per year, but capped benefits at $10,000. Increasing coverage caps to the $100,000 required for the 2012-2013 school year would have raised premiums to $2,000 annually, the Wall Street Journal reported.
The impact of schools losing their “poor quality healthcare” raises the question of whether some health insurance is better than no health insurance, says Haubenreiser, the ACHA president.
“Is something better than nothing? No. You’ve got to have comprehensive, quality coverage,” she says. “One of those super cheap plans will not cover them if there’s an serious accident.”
[Find out what healthcare reform means for consumers.]
While the Supreme Court upheld the healthcare law in its entirety in June, there is still a lot of uncertainty surrounding insurance requirements going into November’s elections.
Republican presidential candidate Mitt Romney vows to repeal the law if elected, and on Wednesday, congressmen in the House voted for the 31st time to repeal the Affordable Care Act. While the vote held more symbolism than legislative weight, it does leave many guessing what the future holds for health insurance plans.
“We try to anticipate what’s going to happen … but in essence, it’s what the federal law is that we have to abide by,” says Thomas from Towson University. “We’re sort of going by the seat of our pants.”