What College Students Need to Know About Health Care Reform

"We have to pass the bill so you can find out what is in it."

--Nancy Pelosi, Speaker of the House

By Cecilia Bonaduce

Nearly 5 million college students are currently uninsured. Most full-time students do not meet the eligibility requirements for employer-based insurance or (until September, 2010) dependent coverage. For years, college students have been forgotten and excluded from meaningful healthcare policy. Will healthcare reform make coverage more accessible to them?

The Patient Protection and Affordable Care Act (PPACA), signed into law by President Obama on March 23, 2010, initiates a comprehensive healthcare reform geared towards decreasing healthcare costs, expanding coverage and improving government-run public health programs.

Major components of the bill include requiring coverage for all citizens and legal residents, establishing Health Benefit Exchanges, expanding both Medicare and Medicaid, and requirements for “ qualifying coverage.”

Conscription into Healthcare

The new law requires all citizens to obtain health insurance by 2014. Failure to do so will result in an annual charge of $95 dollars, an amount that will increase seven-fold over the following two years, or 2.5% of taxable income (whichever is greater). Without affordable healthcare plans, students will have difficulty complying. PPACA attempts to make coverage accessible to young adults. But whether these measures are sufficient is yet to be determined.

For example, even if coverage options are available to college students, it is unclear whether the negative incentives are sufficient to motivate all students to seek coverage. For Cal students, having some form of qualifying insurance (e.g., a student health plan (SHP), employer-based coverage, or parental coverage) is already a strictly-enforced requirement for attendance. All students are automatically enrolled in UC Berkeley’ s Student Health Insurance Plan (SHIP). Those who chose to waive SHIP must prove that have qualifying insurance.

Many students waive SHIP because they are satisfied with their current plan. They might fear that they must change plans as a result of the new law. Although PPACA’ s goal is to stimulate the creation of new insurance options, old policies will be “ grandfathered’ into the law -- so long as the policies meet the PPACA’ s minimum coverage requirements. For students, this might mean that SHIP and other student- only plans will continue to be offered by universities across the nation.

ObamaCare Aims to Protect College Students

Policy makers finally recognized the catch-22 of students coverage: Being a full-time student means no full-time employment and thus no employer-based insurance. PPACA addresses this by allowing parental insurance coverage to apply to children up to age 26 (in effect since September 23), at the parents’ option. It prohibits insurers from excluding pre-existing conditions. In addition to increasing accessibility to students, the new law increases benefits by requiring all health insurance plans to cover preventative care measures (immunizations, vaccinations etc.) and limits premium increases. For young adults who are not interested in student-only options, PPACA offers “ Health Benefit Exchanges.” These will be established by each state to offer more affordable health plans. Exchanges will be online marketplaces that foster competition between insurers, lowering costs to consumers. The federal government also will offer subsidies to individuals to decrease the cost of insurance for those with income between 100-400% above the poverty line.

Potential Pitfalls

PPACA becomes effective along a complex timeline, delaying the implementation of new programs and regulations that could benefit students. Requirement for coverage will not be enforced until 2014. Without an incentive, students currently uninsured will probably remain so. Also, insurance policies are renewed annually, so Spring 2010 graduates whose parents’ coverage policies were renewed before September 23 probably will not have health insurance for the next year (or until the policy is renewed again).

Increasing premiums are another potential PPACA pitfall. Most student-only options are low-benefits/ low-cost plans because they are designed for very healthy young adults. As a result, not all student-only plans offered by universities currently meet the PPACA’ s “ minimum essential coverage” requirements. Increasing the benefits will increase the premiums, making health insurance financially out of reach for many students. Also, the age extension for parental coverage might decrease the enrollment in student- health plans, distributing the risks over a smaller enrollment, and so possibly further increasing premiums.

PPACA doesn’ t specifically address student-only plans, which are disfavored short-term, limited-duration plans. Without modification, students with comprehensive coverage through their universities will not qualify as having “ minimum essential coverage” and will be fined starting in 2014. Also, if the new rules regarding guaranteed renewals and general availability apply to SHP plans, then they must be offered to the entire individual market, not just to students. If SHP is rated according to the whole market instead of on a campus-only basis, it will be less affordable.

To resolve the ambiguity, many universities have requested “ ObamaCare waivers” for their student-only plans. Although many provisions do not go into effect until 2014, universities need answers now because negotiations over long-term contracts with insurers have already begun.

Ultimately the Affordable Care Act will give college students some new rights and benefits. However, until all the new rights and benefits take effect, new uncertainties will cloud the student health care market.

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About the Author: Cecilia Bonaduce studies Public Health with a concentration in infectious disease at UC Berkeley. As Chief Blog Editor of PHA Blog, she enjoys contributing articles in addition to her duties as Editor. Cecilia plans to take a year off to work in the public health field before applying to medical school. Additional interests include cooking, singing and Cal Boxing Club.