College Health Insurance: How the Affordable Care Act impacts students

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July 19th, 2012 by Ken

Once again, it is summer billing season for college students and their parents. While the focus is mostly on tuition and other expenses, an attention getter on a billing statement is the cost of medical insurance. Colleges assess a charge for medical insurance up front to ensure all students are covered in some way. This is important as it provides a safety net for students when they arrive on campus, providing access to a range of available health care services. Getting sick or injured may be the last thing on a student’s mind, but when health treatment is required, the importance of insurance is obvious.

Does ACA affect prescription benefits for students? Yes!

However, having to pay extra money on top of the already high cost of college feels like an even greater squeeze for many families. The Affordable Care Act has specifically made some required changes to college health plans to provide additional services for college students if in the event they are needed. At least college students know they can receive certain guarantees of service if they are paying for college health insurance.

What do students get? The Affordable Care Act requires most student insurance plans to add prescription benefits, increase maximum coverage levels, and offer free preventative care.

Additional benefits that are commonly cited include free annual health exams and breast exams for women and free STD testing for all students. Prescription benefits and increased coverage are a major area as well. For example, Towson University has raised maximum prescription drug coverage from $750 per year to $100,000 per year and increased annual coverage limits to $200,000.

“All of the same standards that will apply to the rest of the health insurance plans will apply to the college health plan,” says Tobin Van Ostern, policy manager for the progressive advocacy group Campus Progress.

Will this drive up premiums? Increasing coverage limits and adding new requirements will drive up premiums for student plans, but it’s generally recognized that these student plans will remain less expensive than individual plans. However, some schools may have a marked increase in insurance premiums beginning this year to account for the additional service requirements, so take a look at that bill.

Can I stay on my parent’s plan? A provision in the Affordable Care Act allows young Americans under 26 to remain on their parents’ health insurance plan. To date, that’s resulted in 2.5 million previously uninsured young Americans gaining health insurance. As noted in last summer’s post about this topic, about 2/3's of college students remain eligible for health insurance through their parents pre-existing policy. If the student is covered under the parents, it probably makes sense to cancel the school coverage and save an additional $1,000 – $2,000. Just make sure the parent’s coverage can extend to the network of available health service providers at and near the school, especially when attending schools far from home.

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