How the New Health Care Law is Causing Colleges to Change Benefits
If you’re a college student, chances are you were offered health insurance through your college at some point—and you may even be covered by a college-administered health care plan now. Until recently, there was very little government oversight affecting the coverage colleges could offer, and they were often not required to adhere to the same standards as employer-based programs. All that is going to change when the rest of the Affordable Care Act goes into effect in 2014—here’s now.
Colleges must fulfill government requirements for minimum coverage
Under the new law, college health insurance plans will need to offer free preventative health screenings, higher coverage levels, and prescription coverage to students—just as employers do. They will also be held to the same coverage expectations as employer-based coverage.
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Costs for health insurance coverage may go up
The unfortunate side effect may be that health insurance programs at traditional and accredited online colleges will have to charge more—because they are being required to offer more. Some colleges have already increased prices for their campus health insurance programs in response to changes that have already gone into effect.
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Students will have more options
That said, students won’t be locked into their university health insurance program if they can’t get coverage through their parents. Starting in the fall of 2013, health insurance exchanges are scheduled to go online that will make it easier for individuals—including students—to shop for their own insurance plans.
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Students will be eligible for subsidies
If you choose your college health insurance plan, you won’t be able to get government assistance to pay your premium. But if you go through the exchanges, you can—and this could potentially reduce the cost of coverage even further, if you qualify. This could contribute to fewer college students going for college health insurance plans—and the potential for college health insurance prices to come down to compete with the individual marketplaces.
Increased access to student loans
The theory is that increased coverage will result in increased demand for doctors, nurses, and other qualified medical staff. As part of the Affordable Care Act, students entering health-related fields will have expanded access to Pell grants, reduces loan repayment rates, and offers loan forgiveness to students who enter the most in-demand health fields. This means that colleges offering health-related programs could have more applicants—and better loan terms.
No limits on pre-existing conditions
In the past, students with health conditions would have serious trouble getting coverage—as health insurance companies often refused to cover pre-existing conditions. Insurance companies are already barred from blocking access to coverage for children with pre-existing conditions; in 2014, that law will extend to adults as well—including college insurance policies. This will be good news to students who already struggle with medical conditions.
An individual mandate
With all the positives comes a negative: you will have to be covered by 2014, or face a penalty. The first year, the penalty will be $95 or 1% of your income, whichever amount is larger, if you stay without coverage in 2014 for more than 90 days. But that amount will go up. This is an aspect of the Affordable Care Act specifically targeted to college students, who are considered the healthiest, least expensive, and most desirable potential customers for health insurance. If you don’t pay into the system, according to the conventional wisdom, it all falls apart. Overall, while more options might mean fewer customers for college health insurance plans, the individual mandate might cover that gap.
Coverage still won’t be cheap under the Affordable Care Act. But hopefully it will be more cost-effective, provide better coverage, and offer students more options than they currently have. With more government regulation of student health care plans, more comprehensive coverage and preventive care, and stronger competition from individual exchanges, hopefully the cost of college health care plans will go down—even as the coverage itself gets better.
Sources
Cato Institute: History of the Individual Care Mandate
HHS.gov: About the Law
Healthcare.gov: Health Insurance Marketplace
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