As millions of people are taking advantage of Open Enrollment and signing up for coverage for 2018, the federal agencies that oversee Obamacare are already working on plans to overhaul the enrollment process and weaken protections for consumers in 2019. Of particular concern to Young Invincibles are proposed regulatory changes that would undermine protections for students enrolled in a college health plan.
Prior to the Affordable Care Act (ACA), approximately one million students had health coverage via a school-sponsored plan. A nationwide investigation found that many of these students foot the bill for expensive, yet inadequate, coverage. For instance, these plans used to have exclusions for consumers with pre-existing conditions, while others set annual limits or failed to cover basic preventive care like immunizations, birth control, and STD/STI testing. As Inside Higher Ed reports, before the ACA’s student health plan regulations took effect, these policies left students like Arijit Guha, then a graduate student at Arizona State University, without coverage after hitting his policy’s $300,000 lifetime limit after being diagnosed with Stage IV colon cancer.
Junk health insurance prior to the ACA was not a phenomenon unique to student health plans, but what made them especially terrible is that they also cost students an arm and a leg. Premiums for these deficient plans could cost students hundreds of dollars a month, and those premium dollars often weren’t actually going to provide students care. A 2010 study by the Massachusetts Division of Health Care Policy & Finance, for example, found that student health plans generated far greater profits for insurers than private insurance plans, and that insurers’ greatest profits per enrollee were generated at the most highly attended institutions — community and public colleges.
Thankfully, in 2012, HHS issued regulatory guidance clarifying that student health plans should be treated as individual health insurance. This guaranteed students the same benefits and protections afforded to consumers on the individual market under the ACA, requiring student health plans to accept students with pre-existing conditions, ban annual and lifetime limits, and provide preventive care at no out-of-pocket cost. This guidance also guaranteed unprecedented transparency in the student health plan market by subjecting the plans to federal rate review, which requires insurance companies that propose to increase premiums by double-digits to justify such increases to regulators and the public.
So how would the Trump Administration’s proposed rule regulate these products that have a history of failing students and giving a windfall to insurance companies? By exempting student health plans from federal rate review rules — explicitly conflicting with the Department’s 2012 guidance. Waiving rate review would allow insurance companies to increase premiums by whatever amount they so choose without having to give a valid reason for the increase. This would create two sets of rules for individual health insurance plans — one for student health plans and one for every other type of individual health insurance. Students have few, if any, choices in picking a student health plan once they select a school, because institutions typically offer students one or very few plan options. This strengthens the case against treating students different from other individuals purchasing individual insurance plans.
The Administration should abandon its proposal to exempt student health plans from federal rate review requirements, because potential premium increases could lead some students to drop their coverage altogether. Students remaining uninsured would be exposed to catastrophic medical costs in the event of a health emergency, which could imperil their financial security and prevent them from finishing their degrees and starting their careers. Students need good health care, and we need a more educated workforce — this plan retreats from those goals.
For a copy of Young Invincibles’ Comments on HHS Proposed 2019 Notice of Benefit and Payment Parameters Rule, please click here.