Health Insurance for College Students: An Update
In 2010, President Obama signed into law sweeping health care legislation that attempts to cover millions of uninsured people—as well as providing better and more comprehensive coverage to those who are already insured.
Recent college graduates are one of the most likely groups to be uncovered. But important changes have happened since the last time we wrote about student health insurance issues and options. Here’s an overview of how your insurance situation will change this year.
You can now stay on your parents’ plan
Before the new health care bill went into effect, college students generally found themselves cut off from their parents’ insurance coverage—sometimes immediately upon graduation, sometimes a few months after, depending on the regulations in each state. As of September 23, 2010, students and other young adults are allowed to stay insured under their parents’ plans until they turn 26—regardless of dependent status—as long as they are unmarried.
There is a caveat, however. Many college campuses don’t accept outside health insurance—which means you’re not covered if you need to go to the campus health center. If you have the option of going off-campus for medical care, that may not be a problem—but if you go to school in a more rural area with limited access, you may still have problems accessing health care while you’re still in school.
After graduation, many former students scrambling for jobs and insurance coverage opt for cheap, “catastrophic coverage” plans that offer coverage only for major health disasters. Previously, there was no official definition of what “health insurance” actually is—insurers were allowed to offer any combination of coverage. Under the new rules, there are official definitions for health insurance—and guidelines for what must be covered under every policy. This includes preventive care and check-ups—which must be provided without co-pays.
These rules are already in effect for new plans, and will apply to all health insurance plans nationwide by 2018. Insurers argue that if they can’t offer bare-bones coverage, cheap insurance plans may not become available at all.
People with pre-existing conditions are covered
One of the stipulations that has already gone into effect is that children cannot be refused coverage because of pre-existing conditions. The same protection for adults doesn’t kick in until 2014. However, if you have a pre-existing condition, you can participate in a temporary high-risk pool if you’ve been uninsured for six months or more, until the new rules for adults go into effect. This should make it easier for those with pre-existing medical conditions to get coverage.
Your campus health insurance plan will improve
If you have a college health insurance plan already, you probably know that campus health insurance programs often offer meager benefits—for a lot of money. Many colleges use health insurance programs as sources of income, taking measures to encourage or force students and parents to buy into expensive and less comprehensive campus plans. According to a study performed by the Massachusetts Division of Health Care Finance and Policy, many colleges in Massachusetts have lower medical loss ratios than other plans—often around 50%. This means that only 50% of all money paid by policyholders goes toward medical care—the rest goes to profit or administrative costs.
As of January 1, 2011, however, every insurance plan—including campus health care—must demonstrate a medical loss ratio of at least 80-85%. Some schools are already taking measures to bring their insurance up to regulation standards.
No more lifetime caps
Many student health care plans offered by colleges have exceptionally low spending caps compared to the general insurance market. Many school-provided plans limit benefits on a per-condition, per-lifetime basis, meaning that you can only expect the insurance provider to spend up to a certain dollar limit on treatments for each medical condition you have. Effective in 2010, no insurance plan, including college health insurance policies, will be allowed to place any lifetime limit on coverage—so you’ll be covered no matter how high your medical bills get.
Health insurance still won’t be easy for college students. There is no public option in the health care bill, and while it’s still too early to know for sure, it’s unlikely the bill will be able to bring down skyrocketing medical and premium costs. In addition, colleges are lobbying the government for the continued ability to mandate that all enrolled students participate in college plans, even if their parents’ coverage is cheaper and more comprehensive. But with these measures, it’s likely that health insurance coverage will be a little more accessible to college students.
New York Times: New Money Rules for Recent Graduates
CollegeCandy.com: Obama’s Health Care Plan: What Does It Mean?
US News: 5 Ways Health Care Reform Affects College Students
Marketwire.com: Health Insurance Resources for 2010 College Grads
Daily Californian: New Health Insurance Law Mandates Coverage for All
HigherEdWatch: Surveying the Battlefield: College Health Insurance and Health Care Reform
Massachusetts Division of Health Care Finance and Policy: An Interim Report Card on Massachusetts Health Care Reform
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