What Health-Care Reform Means for College Students
After years of speculation, the Supreme Court ruled President Obama’s the Patient Protection and Affordable Care Act constitutional, eliminating any doubt over its sweeping changes to the medical and health insurance industries.
“The provisions in this [law] will not only affect them personally, but shape how health care will be provided for all future students and the rest of our nation,” says Eric Oakland, benefits consultant at the Ruggieri Consulting Group. “The changes, as they stand today, affect the way health care is delivered, the cost of health care, who will receive health care and many other aspects not yet fully drawn out.”
To capitalize on the benefits and changes the legislation extends to them, college students need to understand how the changes under the PPACA will affect them, how their benefits will change and how it impacts the cost of insurance and care.
You Get Coverage Until 26
Students and grads can stay on their parents’ insurance coverage until age 26, which can be a big money saver for you young adults struggling to find jobs with benefits.
“This could give the grad some time to gain some experience in a position, receive a good salary and not have to worry about benefits for some time,” says Oakland. “If a student can't find the perfect job right away, then it allows them to be more selective in their choice because one of the major expenses they would face would be taken care of by being on their parents’ plan.”
Paying for health insurance out of pocket is very expensive, with some plans costing upwards of $300 a month.
“If coverage is more generous now, then the cost is likely to increase,” says Dr. Kyle Ross, assistant professor of economics specializing in health economics at the University of Arkansas at Little Rock. “Also, if insurers are limited in the difference they can charge different age groups, the cost of insurance for young adults is likely to rise.”
Preventative Care Coverage will Expand
PPACA expands coverage of preventative services like contraceptives, mammograms, colonoscopies without charging a deductible, co-pay or coinsurance.
Ross recommends that young adults review and understand the coverage they will now be purchasing or receiving as it may change substantially from what they had before, and to understand the financial implications of the new requirements of the ACA.
Colleges Could Drop Student Health Plans
Ross warns that some colleges may stop offering health coverage due to rising costs.
“The plans offered to students through their college or university may no longer be all that much different than going through an insurance company,” says Ross. “The minimal coverage provided by student health insurance plans will now be illegal--this will make coverage purchased through a college or university redundant to coverage that can be purchased on the exchanges.”
Students who must purchase an individual plan may be eligible for financial assistance by buying coverage on these exchanges, says Sandy Praeger, Kansas Insurance commissioner and chair of the NAIC Health Insurance and Managed Care Committee.
“In that case, they might be able to get a fairly affordable health insurance policy that’s more comprehensive than perhaps might have been offered by the school beforehand.”
Expect Penalties for Non-Coverage
Praeger explains that if the law stays as it is, students will have to pay a penalty if they don’t purchase coverage when the act goes into full effect in 2014.
The penalty is “$95 for the first year and [can go] up to $700 for an individual,” she says. “The bigger penalty is if you need health care services and you don’t have health insurance—that’s where the real costs are.”