Our colleagues at the Higher Ed Watch have followed developments in the college-sponsored student health insurance market and posted yesterday about regulations the Administration will soon issue to largely determine the future of these plans post-reform. We are cross-posting Maggie Severn's thoughtful post for our New Health Dialogue readers.
In the coming days, the Obama administration is expected to issue regulations that may determine the future of college-sponsored student health insurance plans. The stakes are high for students and parents, as these regulations are expected to clarify the types of changes that must be made to these college-sponsored plans to comply with the massive health-care reform legislation that Congress passed earlier this year.
Currently, accessing health care on campus is costly and restrictive for many students. As Higher Ed Watch has reported, colleges tend to strongly encourage and sometimes mandate students to buy school-sponsored student health insurance plans (SHIPS) even if the students or their families have alternative health insurance that offers more comprehensive coverage. At many schools, students are allowed to opt out but are charged much higher fees when they try to use their insurance at their campus health centers.
Though some colleges do provide high-quality, low-cost health insurance to students, many also provide extremely inadequate coverage -- with low annual and lifetime caps, restrictions for certain services and conditions, and paltry pay-out rates.
If the regulations that the administration issues treat SHIPS like other group plans under the legislation, many of these plans would be forced to improve. But lobbyists for colleges and campus health professionals, who derive great benefits from these lucrative plans, have an alternative proposal: keeping as much of the current system in place as possible.
In August, the American Council on Education sent a letter to the White House and the U.S. Department of Health and Human Services on behalf of itself, the American College Health Association, and a host of other higher education associations, arguing that student plans should not be designated as group or individual plans under the new health care regulations. Instead they requested that SHIPS be classified as “limited-duration short term health plans,” a category that is more or less undefined in the health care reform legislation.
In the burgeoning healthcare system, “limited-duration short term health plans” are gray areas -- the standards that they would have to meet are not currently defined, and it will likely fall to states to regulate them. This could be a dangerous route that could leave student health plans severely lacking.
To its credit, ACE did request that future student health insurance plans be made available to students without excluding any pre-existing conditions (current plans often do), and that they meet “at a minimum, the actuarial standards for the Bronze Plan as defined in the” health-reform bill. To meet those standards, SHIPS would have to cover 60% of the medical costs that are incurred by the college population that they insure.
It appears that ACE, AHA, and the other higher-education lobbying groups are trying to meet the new law half way. But in this case, half way isn’t far enough.
The best way to ensure that colleges provide adequate health care plans in the future would be to not grant them any special status, and instead treat them as group plans, which they essentially are. Colleges are concerned that that raising the bar for college health insurance would drive up the cost of premiums, and leave plans too expensive for students to afford. This is a legitimate concern, but the fact is that some colleges already do provide high-quality insurance while keeping costs down for students -- particularly because students are a young, healthy, and therefore inexpensive group to insure.
But if Obama administration officials decide to grant ACE’s request, and give these plans “limited-duration short term” status, then they need to set some conditions to ensure that these plans keep with health reform’s mission to provide better and more affordable insurance. For example, the new rules should require SHIPS to do the following:
- Raise medical loss ratios: If colleges are granted “short-term limited duration” status, these plans must be held to standards that ensure they provide adequate coverage. This includes raising medical loss ratios (which denote the amount money an insurer pays out in benefits versus the amount of money paid to insurers in premiums), and eliminating both annual and lifetime caps on illnesses.
- Stop excluding pre-existing conditions: One of the most popular provisions in the health care bill is the one that bars insurance companies from denying coverage to patients with pre-existing conditions. It would be unconscionable for the government to allow student health care plans to evade this prohibition.
- Stop penalizing students who opt out: The federal government and states must ensure that students that choose to remain on their parent’s health insurance or are on Medicaid can use their insurance at on-campus health centers, and are not charged large fees for doing so. This issue will be especially relevant if college plans don’t raise their standards, and students are driven away from SHIPs in search of better options.
With these regulations, the Obama administration has the opportunity to meaningfully change to health care plans that have been failing students too often, for too long. Hopefully, this opportunity for reform will not be missed.