Insurance industry sources are telling the National Journal’s Meghan McCarthy that the Department of Health and Human Services (HHS) may be “leaning” toward allowing student health plans (SHP) — health insurance policies offered to college students — to be classified as “short-term-duration” coverage, potentially exempting these policies from some of the law’s consumer protections. The news comes after various youth groups had been lobbying the agency to classify SHPs as individual health plans to ensure that the policies have to abide by the regulatory baseline created in the Affordable Care Act. McCarthy reports:
Whatever the final determination, HHS has yet another difficult decision to make on how specific consumer protections in the health care law will apply to a subset of insurance plans before exchanges start operating in 2014.
Health insurance coverage offered to students by colleges and universities arguably falls into a gray area under the health care law, especially when it comes to deciding whether certain consumer protections apply to the plans. That’s because the law, as written, applies certain consumer protections only to individual, small-group, and large-group plans.
Insurance companies and colleges argue that their student health plans do not fall within any of those categories, but are instead “short-term” coverage, a categorization that could ultimately exempt the plans from many consumer-protection regulations.
But those colleges — represented by The American Council on Education — that are lobbying for the “short-term coverage” label are insisting that their goal isn’t to exempt plans from the minimum standards. “First, colleges are not seeking either an exemption or a waiver from the law,” Terry Hartle, senior vice president of ACE and Steven Bloom, the organization’s assistant director of federal relations write in today’s Inside HigherEd. “[W]e have asked HHS to provide rules of the road on two key topics: What insurance reforms in ACA apply to student health plans?… [and] Assuming student health plans incorporate required insurance reforms and provide at least a minimum ACA-defined level of coverage, will that satisfy the individual mandate to purchase health insurance under ACA?”
Presumably, if the plans do meet the minimum standards for coverage — that is, by 2014, if a student is enrolled in a SHP she or he will meet the individual requirement — the plans will have to abide by the basic floor of coverage and will thus have to comply with at least some of the consumer protections found in the health law — regardless of their legal classification. And if that’s the case, then regulators will have to ensure that the industry cleans up some of its most egregious practices.
A recent investigation by New York Attorney General Andrew Cuomo, for instance, found that some college plans “provide woefully deficient coverage, with maximum overall caps or limits on particular types of services which can leave students with large, unreimbursed medical bills.” What’s more, the investigation found that “[m]any student plans payout far too little in claims compared to the premiums charged to the students,” exclude coverage for pre-existing conditions, and “provide no coverage at all for preventative services which college students typically need.”