This post was authored by Rory O’Sullivan, Policy Director, from the Young Invincibles.
The Department of Health and Human Services recently released final rules that apply the Affordable Care Act’s (ACA) consumer protections to college health plans starting in Fall 2012. College students will now receive the same basic consumer protections and benefits as all Americans.
Historically, student health plans have exhibited many of the worst practices in the health insurance industry. Some plans cover no more than $1,500 a year in benefits. Others have medical loss ratios as low as 35%, meaning they spend only 35 cents of every dollar in premiums on actual medical care, with the rest going toward administrative expenses and profits. As a result, profit margins on certain college health plans reach 5 times the industry average.
The finalized regulations will end these practices by ensuring that student health plans are subject to the same basic protections as all individual insurance plans. As of January 1, 2013, student health plans must meet a minimum medical loss ratio of 70%, rising to 80% in January 1, 2014. The rules also phase out annual benefit caps, with caps no less than $100,000 in the 2012/13 school year, $500,000 in the 2013/14 school year, and no annual caps thereafter. Plans will also need to eliminate lifetime benefit caps, discrimination based on pre-existing conditions, and rescissions. Finally, all student health plans must provide free preventive care. These are vast improvements for consumers.
As part of the final rule, HHS announced that religiously-affiliated colleges and universities would have the choice of a 1-year waiting period where they would not have to provide birth control through their college health plans. After that 1-year period, these schools will have to provide access to birth control with no-cost sharing, with the accommodation that the insurance company would pay to cover the birth control, but not the school.
Certainly, more work needs to be done to ensure that all students have quality affordable insurance. But the recent regulations will ensure substantial quality improvements for these young consumers.
The views reflected in this expert column are those of the individual authors and do not necessarily represent those of the O’Neill Institute for National and Global Health Law or Georgetown University. This blog is solely informational in nature, and not intended as a substitute for competent legal advice from a licensed and retained attorney in your state or country.