The Department of Health and Human Services released proposed regulationsthat promise to improve health insurance for as many as 3 million students on college health plans.
The proposed regulations state that college health plans must provide the same basic protections as all individual market plans under the new health care law. That means that some of the worst practices in the college health plan industry would ultimately be eliminated, like:
- Discrimination based on a pre-existing conditions;
- Annual and lifetime benefit caps; and
- Low Medical Loss Ratios (percentage of premium dollars going toward care).
Moreover, college students on these plans would gain access to free preventive care and an increased range of benefits. These benefits and protections go into effect after January 1, 2012.
College Health Plans: Prior Problems
Historically, college health plans have suffered from lax oversight, which allowed insurance companies to take advantage of students. While coverage levels vary between schools, too many college health plans are a bad deal for young consumers. These plans can have as little as 35 percent of premium dollars going towards actual care, an allotment of only $1,500 of coverage per year, and discriminate against students with preexisting conditions. As a result, profit margins can exceed 5 times the industry average.
ACA Regulations: Providing Better Value for Students
The proposed regulations would protect students by making clear that college health plans are subject to the same basic protections as all individual insurance plans under the new law. That means starting in Fall 2012, students would see the following improvements:
- A prohibition on discriminating against students under the age of 19 with pre-existing conditions;
- 80 percent of their premium dollars go toward actual care;
- Elimination of lifetime benefit caps, and the phasing out of annual benefits caps; and
- Free preventive care.
By 2014, the benefits would be even greater, as plans would be required to:
- Eliminate discrimination based on pre-existing conditions for all ages; and
- Expand benefits to meet the essential benefits package.
Publicly available data reveals that these improvements can be made while keeping college health plans affordable. Finally, by 2014, students should have a range of decent options, from an improved college health plan to subsidized plans in the exchange, to Medicaid.