![unsatisfactory options: (1) purchase COBRA (presuming it is even affordable, which is a bold
presumption considering research shows that premiums can cost up to 84 percent of one’s
unemployment income); (2) wait without insurance coverage until a new job is found and a new
insurance plan can start; or (3) enroll in Medicaid and have access to far less benefits, a smaller
network of health care providers, and for some, the social stigma of having government subsidized
health insurance.
While ACA didn’t appropriately tackle portability, by allowing coverage for children until the age of
26 it solved a major hurdle parents have dealt with for years, namely: how to keep their children
insured past the age of 18 (although some states did previously mandate children could stay on
until age 24). So why would colleges ask Sebelius if they could get a special waiver to continue
selling these limited benefit plans? Because they are highly profitable.
So much so in fact the attorney general of New York, Andrew M.
2 of 2
Cuomo, commisioned a report after a year-and-a-half
investigation which found the following: Annual premiums for
student plans run as high as $2,500 and some do not cover pre-
existing conditions or prescription drugs. Caps on coverage can
be as low as $25,000 annually and $700 per illness.
Cuomo went on to note that “[c]ollege-sponsored, private
health plans cover about one million students and generate $1
billion in annual revenue for insurers. The plans can be costly
for students and extremely limited in their coverage.” Colleg es a r e t r y in g t o g et ou t of
Unfortunately these plans are not in the best interest of com ply in g w it h t h e h ea lt h ca r e
r efor m la w
students and to allow colleges to waive out of an important
provision that would require a "minimum" standard of care would be outrageous.
In this cat and mouse game of regulation changes and companies finding loopholes in which to
exploit them, I’m reminded of a quote in the movie Runaway Jury -- it’s time the regulators
became a little more cat and a lot less mouse.
John Wilson blogs at Policy Diary on health and education policy. Follow him on Twitter and
become a fan on Facebook.
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Colleges try to sneak out of health coverage for students
- 1. 1 of 2 Colleges try to sneak out of health coverage for students For many folks it’s hard not be cynical about the state of health care and, in particular, health insurance in this country. While the government rightfully attempts to protect and empower consumers, health insurance companies and colleges are trying to squeeze maximum revenue out of students by offering limited benefit plans at relatively high rates. This is not meant to demonize health insurance companies or universities. Clearly, some folks could benefit from a limited benefit plan based on their age, health status, risk profile, Colleg es a r e t r y in g t o g et ou t of family history, and ability to pay. However recent pleas by com ply in g w it h t h e h ea lt h ca r e r efor m la w colleges to waive out of some caps and new rules under the Patient Care and Affordable Care Act (ACA) should fall on deaf ears. Some colleges along with the American Council on Education (who collectively account for 4.5 million students) assert in a letter, dated Aug. 12 and sent to Secretary of Health Kathleen Sebelius, that they will not be able to offer health plans that meet the “essential minimum coverage” required of all individuals in the individual mandate (set to go into effect in 2014). The mandate imposes an annual penalty on individuals who do not have qualifying plans meeting this coverage standard (See ACA §1501). What these colleges fail to mention in the letter is the provision in ACA allowing students to stay on their parents’ health insurance coverage until they are 26 years of age. This provision will cover the far majority of students who typically purchase these limited benefit plans in the first place. Read More: Why Obama doesn't need to defend his Christianity Saving Fisk University is our responsibility Obama on Education: “The economic issue of our time” Of course, one particular omission in the ACA, which I have written about previously on my blog, is the lack of attention to health insurance portability. We have an employer-based system that places the onus on the individual employee to choose an insurance plan essentially based on what their employer can afford. Worse yet, if that employer leaves they are left with three unsatisfactory options: (1) purchase COBRA (presuming it is even affordable, which is a bold
- 2. unsatisfactory options: (1) purchase COBRA (presuming it is even affordable, which is a bold presumption considering research shows that premiums can cost up to 84 percent of one’s unemployment income); (2) wait without insurance coverage until a new job is found and a new insurance plan can start; or (3) enroll in Medicaid and have access to far less benefits, a smaller network of health care providers, and for some, the social stigma of having government subsidized health insurance. While ACA didn’t appropriately tackle portability, by allowing coverage for children until the age of 26 it solved a major hurdle parents have dealt with for years, namely: how to keep their children insured past the age of 18 (although some states did previously mandate children could stay on until age 24). So why would colleges ask Sebelius if they could get a special waiver to continue selling these limited benefit plans? Because they are highly profitable. So much so in fact the attorney general of New York, Andrew M. 2 of 2 Cuomo, commisioned a report after a year-and-a-half investigation which found the following: Annual premiums for student plans run as high as $2,500 and some do not cover pre- existing conditions or prescription drugs. Caps on coverage can be as low as $25,000 annually and $700 per illness. Cuomo went on to note that “[c]ollege-sponsored, private health plans cover about one million students and generate $1 billion in annual revenue for insurers. The plans can be costly for students and extremely limited in their coverage.” Colleg es a r e t r y in g t o g et ou t of Unfortunately these plans are not in the best interest of com ply in g w it h t h e h ea lt h ca r e r efor m la w students and to allow colleges to waive out of an important provision that would require a "minimum" standard of care would be outrageous. In this cat and mouse game of regulation changes and companies finding loopholes in which to exploit them, I’m reminded of a quote in the movie Runaway Jury -- it’s time the regulators became a little more cat and a lot less mouse. John Wilson blogs at Policy Diary on health and education policy. Follow him on Twitter and become a fan on Facebook. theloop21.com http://theloop21.com/money/colleges-seek-loophole -student-health-insurance-plans