Student health plans forced to adapt to ACA requirements

8:14 PM, Jan 11, 2014   |    comments
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(USA TODAY) - Thanks to the Affordable Care Act, most young Americans can stay on their parents' health insurance until age 26 - a shift in law that has extended health coverage to more than 3.1 million people, according to the Obama administration.

But many college and graduate students - either by choice or because their parents lack coverage - are still enrolling in university-sponsored health care plans, which have been forced to adapt or discontinue with the gradual implementation of the ACA over the past few years.

"Most of the schools we're tracking say they have had increases in enrollment in their student health plan over the last two to three years, despite the age 26 provision," says Stephen Beckley, who runs a health care management consulting firm that specializes in higher education.

Because of the ACA, school plans have gradually been required to increase annual and lifetime limits, provide preventive care without cost sharing and begin accepting some students with pre-existing conditions.

The start of 2014 was an important milestone in the ACA's implementation for schools, which were given their own timetable for meeting requirements.

All fully insured plans issued by schools on or after Jan. 1 will have to meet the final ACA standards for coverage, meaning no annual or lifetime limits and no exclusions for pre-existing conditions, among other things.

Beckley says self-funded student plans- which are primarily regulated by states but cover about 200,000 students - will meet the ACA's core coverage standards for the most part, to qualify as "minimum essential coverage" under the individual mandate.

These changes have impacted schools differently, depending on the quality of coverage that existed before the ACA's passage.

Some schools with previously bare-bones plans have been forced to stop offering coverage or increase benefits and premiums substantially, says Anita Barkin, director of health services at Carnegie Mellon University.

Schools that were already meeting most of the ACA's core requirements have continued mostly business-as-usual.

An annual study put out by Beckley's firm, Hodgkins Beckley Consulting, suggests that, in general, the ACA has pushed student premiums up slightly at schools which have historically offered good-quality plans.

Between the 2011-2012 and 2012-2013 school years, the average annual cost of student plans for those age 25 or younger increased 9% at public colleges and universities and 7.8% at private colleges and universities, according to the study of 40 institutions.

Beckley estimates the increases would have been about three percentage points lower without the ACA and expects to see a similar ACA-driven impact when he crunches the numbers for this school year.

Still, for many students, university-sponsored plans offer the best coverage at the lowest price - particularly for students who don't qualify for subsidies on the individual exchanges or who are attending school outside their home state.

"College students are just a different type of population. They are more transient, and the student health plans are very specific to that group," says Jenny Haubenreiser, immediate past president of the American College Health Association.

Unlike on the health insurance exchanges, where the young and the healthy pay to subsidize the old and the sick, student health plans exist within their own risk pool, allowing for lower costs.

Sandra Zuniga, 23, a graduate student at John Hopkins University, is from Virginia, one of the 25 states not expanding Medicaid under the ACA.

Zuniga's mother doesn't have insurance, and because they don't qualify for Medicaid without the expansion, she and her mom discovered it would actually be cheaper to buy insurance as individuals rather than as a family unit.

"The new law is great," says Zuniga, who has a student health plan, "but we need to also hold our local governments accountable for choosing to not participate in programs that could best support low-income families achieve affordable care."

Dejuan Patterson, 25, is a graduate student at Bowie State University, where he used to be covered under a small, $49-per-semester student plan. He lost coverage when his school canceled its plan for the 2013-2014 school year after premiums increased to about $1,800 per year to meet ACA standards.

According to a statement on its website, the school chose to cancel the plan after receiving negative feedback about the cost increase from students, who preferred to "keep their education costs low and get better health coverage with new insurance options now becoming available under the Affordable Care Act."

Patterson, who is uninsured, was happy with the previous coverage and says he feels uneasy trying to navigate a complicated insurance market.

"It may have been a real basic plan, but ... it was appropriate for the health condition that I am in," he says.

Student health plans will continue to adapt in the coming years, Haubenreiser says, with unpredictable effects on premiums and enrollment.

"There's a lot of uncertainty in terms of the impact of ACA on the student plans, and it's really up to students, parents to really look at what their options are and to realize that there will be variations in states, there will be variations within an institution," she says.

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