NCPA - National Center for Policy Analysis

Big Changes in College Health Plans

June 11, 2012

Nearly all health insurance plans offered in the United States will be required to offer more coverage to their enrollees under the new health care reform law.  Perhaps an unintended consequence, however, will be the law's effect on colleges throughout the country, many of which previously offered low-cost, low-coverage plans to their students, says the Wall Street Journal.

Bethany College in Lindsborg, Kansas, for example, has decided to discontinue its school-run health insurance offering entirely, arguing that it could no longer justify the financial expense it would be imposing on students.

  • This last year, the school offered a 12-month plan that cost students $445, while capping payouts at $10,000.
  • The Obama administration, however, requires that the payout cap be set at a minimum of $100,000.
  • The college said that students would have had to pay more than $2,000 to get that new level of coverage.
  • Lenoir-Rhyne University in Hickory, North Carolina, the University of Puget Sound in Tacoma, Washington, and Cornell College in Mount Vernon, Iowa, are all following a similar policy.

Other schools will not be so merciful to their students.  The State University of New York at Plattsburgh, for example, will offer its health care plan to students for between $1,300 and $1,600.  It will also require students to have health insurance, either through the school or not.

Importantly, this impact of the law is not isolated to only a few small colleges.  Rather, many students across the country will encounter similar issues at their own institutions.

  • According to a 2008 study by the Government Accountability Office (GAO), roughly two-thirds of college students in that year received health insurance from the plans of their parents.
  • Around 600,000 students, however, bought their own insurance in that year, and many of these students purchased that insurance through their school.
  • This represents approximately 7 percent of all college students ages 18 to 23.
  • The GAO found that roughly 60 percent of schools' health insurance plans maintained coverage of $50,000 or less for specific conditions, and almost all of the rest had some sort of payout caps that will have to be done away with by 2014, according to the health care law.

Source: Louise Radnofsky, "Big Changes in College Health Plans," Wall Street Journal, June 4, 2012.

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