What’s New for 2012

It’s been two years now since the enactment of the 2010 health reform provision allowing adult children to retain coverage on a parent’s plan until age 26. We’ve got about two more years to go until the 2014 provisions of the law require most people to have coverage and ensure that no one’s declined based on their personal medical history.

However, here are a couple important health reform changes hitting the market now which affect the insurance choices available for today’s college students. It’s vital that students are aware of these changes for the 2012 school season:

·         School-sponsored health insurance plans are changing, some are dying. Colleges and universities have long offered school-sponsored health insurance plans and encouraged students to enroll. In previous years, as many as 1 million American college students were enrolled in school-sponsored health insurance plans, according to the American Council on Education. These are often limited-benefit plans that sometimes require students to see on-campus doctors and place strict (sometimes quite low) caps on how much can be paid toward student medical care. These plans were not historically regulated in the same way as other health insurance plans, but the ACA is bringing them into line with the rest of the market between now and 2014.

o   60% of school-sponsored plans were found to have a coverage cap of $50,000 or less, according to a 2008 Government Accountability Office study; almost all colleges surveyed had coverage caps that would need to be phased out according to the ACA

o   Most student plans are now required to add Rx coverage, if they didn’t already have it; they’re also required to raise their coverage caps substantially in 2012, and to offer specified preventive care services at no out-of-pocket cost to enrollees.

o   Coverage caps will be phased out entirely by back-to-school 2014.

o   As a result, the cost of school-sponsored health insurance plans is on the rise; this means that student premiums for school-sponsored plans are increasing for many

o   As a result of increased costs, some colleges and universities are deciding to drop out of the health insurance business entirely

·         Women’s health coverage is expanded, with consequences for some student plans. Effective August 1, 2012, the ACA now requires most health insurance plans to provide coverage for a broader array of women’s health services, including access to contraception. This applies to all Americans but students at some schools may face particular challenges.

o   Some religious-affiliated schools are filing suit in order to avoid this and other requirements of the ACA

o   In the meantime, some colleges are dropping their school-sponsored coverage, leaving some students in the lurch

Back-to-School Health Insurance Tips

With these changes in mind, eHealthInsurance has prepared an updated series of health insurance tips for college students and their parents:

1)      Know your options, and don’t wait to get coverage. Many colleges and universities require you to have health insurance before you can enroll in classes, which means that going uninsured may complicate your enrollment.  It’s never a good idea to wait until you’re sick before you look for coverage; you may be too late to avoid serious financial consequences. So take a few minutes to get familiar with your options and compare costs and benefits. Your options may include:

o   Staying on Mom and Dad’s plan (until your 26^th birthday)

o   Buying your own individual health insurance plan

o   Enrolling in a school-sponsored plan

o   Getting coverage through an employer

o   Enrolling in a government-sponsored coverage option

2)      Consider alternatives to staying on Mom and Dad’s plan. If you’re going to school in another state, coverage under a parent’s plan may not be a good idea.  Many health insurance plans only provide the highest level of coverage when you use their network of preferred doctors and hospitals. Those networks don’t always extend out of state. Even if you’re studying in-state, you should get quotes for individual plans and compare that to how much it costs to stay on or enroll in your parents’ health insurance plan. You may be able to find more affordable coverage with benefits that still meet your needs.

3)      Read the fine print on some school-sponsored health plans. While coverage under many school plans is improving as a result of the health reform law, many of these plans still place dollar caps on your coverage. A serious injury or illness that puts you in the hospital could burn through your coverage quickly, leaving you or your parents with big bills. Some school-sponsored plans may also require you to receive most or all of your medical care on campus, or through the student medical center, which may not be an option when you’re at home.

4)      Understand the benefits (and risks) of buying coverage on your own. Check out your individual health insurance options, especially if you’re going to school in a different state and your parents’ plan won’t cover you. Work with a licensed agent like eHealthInsurance.com to compare quotes. As a result of the health reform law, individual plans now provide more robust benefits and access to more preventive care at no out-of-pocket cost. Depending on where you live, your health history, and what kind of coverage you want, you may find some affordable options – Mom and Dad may even help you cover the premiums. But be aware that you can still be turned down for individual coverage based on a pre-existing medical condition.

5)      Consider non-school-sponsored “student” plans. These plans may be especially attractive for students who are attending school in a different state or who plan to travel back and forth a lot. Your benefits and coverage levels typically won’t change when you travel from one state to another (international coverage may even be available), and you may have the option to pay up-front for year-round coverage rather than pay month-to-month.

6)      Don’t let yourself fall through the cracks as an older student. Thanks to the tough job market and economy, more and more older persons are going back to school. Undergraduates and graduate students age 26 and older do not qualify to stay on their parents’ health insurance plans, even if they’re in school full-time. The health care reform law limits that option to younger adults. So, if you’re age 26 or older – or if you’re going to turn 26 in the middle of the academic year – it’s a good idea to explore other health insurance alternatives now.

Helpful Facts

·         As many as 1 million American college students enrolled in school-sponsored health insurance plans, according to the American Council on Education. [SOURCE]

·         By the time the 2013-2014 school year arrives, school-sponsored plans must cover at least $500,000 in medical expenses, and the year after that plans can't have any payout cap [SOURCE]

·         $110 per month was the average price paid per month (as of February 2011) for individual health insurance coverage by people between the ages of 18-24 [SOURCE]

• More than seven-in-ten current students (72%) and recent grads (75%) with loans say that they would rather go without health insurance than default on their student loans [SOURCE]

Resources

·         Health Insurance 101 – A buyer’s guide for students in search of health insurance

·         Health Insurance for Students – A video prepared by eHealthInsurance, available on YouTube

·         “Individual Health Insurance For Dummies” a free book prepared by eHealthInsurance and the For Dummies people, available in print or electronic formats