Often-maligned health care plans for college students will likely be seeing changes as new federal health care regulations are phased in during the next few years.
The insurance plans vary widely from state to state. They typically offer better deals than purchasing insurance individually, but usually aren’t as good as deals offered by employers.
But across the country, student health insurance officials are waiting for the Department of Health and Human Services to make some important decisions on how to deal with the plans.
The federal government has to decide whether student health care plans will meet minimum standards that would allow them to satisfy a requirement for all U.S. citizens to obtain coverage by 2014. If citizens don’t obtain coverage that meets the requirements, they would face a tax penalty.
National organizations like the American Council on Education and the American College Health Association have urged the federal government to accept student health plans if they meet minimum “Bronze Plan” criteria under the national health care law.
That issue, along with other provisions of the law, “could make it impossible for colleges and universities to continue to offer student health plans,” according to a letter sent to federal health officials by the ACE.
In Kansas, 7,264 students and dependents are enrolled in a student health care plan offered by the Kansas Board of Regents for students at its six state universities.
While that number may be a small portion of the total number of students enrolled, many of the students’ parents may be unemployed, or they might be out of their parents’ network of hospitals if they live out-of-state.
“The ability to stay on parents’ policies up to age 26 may take care of it for a lot of students,” said Sandy Praeger, Kansas insurance commissioner, referencing another new portion of the law. “But there will still be a need for these policies going forward.”
She said the student plans could become obsolete after 2014 if they don’t continue to be less expensive than what students could obtain through new state health care exchanges set up by the national health care law. But that remains to be seen, she said.
A plan like Kansas’ — with a higher-than-average (for student plans) $100,000 annual limit on coverage — could be the kind that would meet the federal minimum essential coverage standards, Praeger said.
The plans are facing additional challenges, such as a rule that will require insurance providers to spend 80 percent or more of their premium revenue on providing benefits — a rule designed to minimize insurance companies’ profit margins.
But Praeger said there may be reasons to include exceptions to that figure — particularly with student plans, when insurers are providing coverage for a generally healthy population.
“This is a great population to insure,” she said. “They’re young and healthy ... there are probably very few claims” made each year from students.
Praeger serves as chairwoman for a committee looking at that issue for the national organization of state insurance commissioners, and she said that group plans to suggest to the federal government that the regulation be re-examined in some cases.
The student plans are something like a tug-of-war, with more benefits meaning more cost, and vice versa, said Diane Plumly, director of the student health program at Ohio State University and the chairwoman of the student health insurance benefit plan coalition for ACHA.
“I think the concern that the college health community has is that costs maybe create a barrier for some institutions and for their students to be able to get insurance,” she said.
Others like the Lookout Mountain Group, a study group of college health officials to consider student health care needs, have disagreedwith the ACE, saying that student health plans need to be held to even higher standards than the “bronze” level.
Jim Mitchell, a spokesman for the group and the director of student health services at Montana State University, said the group wanted to prevent students from being stuck with low-quality student insurance plans.
“The sooner that plans like that either go away or get better, the better,” Mitchell said.
Officials at the Kansas Board of Regents said they, too, were waiting for clarification from the federal government before they could say how Kansas’ insurance plans could change.
In a potentially confusing and frustrating world of new health care regulations, Praeger said, consumers will have to become informed about their new options — something that her office will hope to assist moving into the future.
“This is important legislation that has a very well-intentioned goal,” Praeger said. “We just want to make sure we get it right.”