Obamacare Regulations Will Lead To More Comprehensive Insurance For Students

The Affordable Care Act expands health coverage to millions of uninsured Americans and creates minimum requirements of what insurance plans must cover. And enforcing the basic standards is causing the end of limited-benefit plans that capped benefits and don’t meet ACA guidelines, leaving consumers with better health care options. But according to the Wall Street Journal, this is leading a few colleges to drop their low quality, low cost student insurance plans in isolated cases because those types of plans are being phased out by the more comprehensive standards:

The new rules are likely to affect a broad swath of American colleges, particularly small ones. Some 60% of schools’ plans had coverage of $50,000 or less for specific conditions, and almost all of the rest had some sort of payout caps that they will have to do away with by 2014, the [Government Accountability Office] study found.

The Obama administration argues that the most-limited-benefit plans colleges previously offered hardly counted as coverage at all.

“Given today’s health system,” the plans “wouldn’t represent a good value,” said Michael Hash, director of the Office of Health Reform at the Department of Health and Human Services. Plans with caps starting at $5,000 or $10,000 “would likely not begin to cover the first day in the hospital,” he said.

About 600,000 students — 7 percent of 18 to 23-year-olds in college — bought insurance through their school’s plans, according to the GAO. Some of these schools require students to have insurance, but the plans some schools offer are mini-med plans that provide almost no protection when students actually get sick or injured. Upping the standards may lead a few schools, like Bethany College in Kansas, to drop student plans, but it will lead to much better coverage for more students.


And dropping coverage or face rising costs is not the only option for colleges that offer student health insurance plans. In Massachusetts, for example, colleges regularly imposed a range of benefits at varying costs for student plans before 2009. To address the problem, a number of schools joined together to buy coverage collectively for 12,000 students without dramatically increasing premiums.

The example in Massachusetts shows that colleges have more options that increasing their prices or dumping coverage. That way, students can still have access to insurance through their schools, but they will be guaranteed it’s better coverage because of the health care reform law’s regulations.