A new proposal will extend consumer protections outlined in President Barack Obama’s health care law to students purchasing health insurance plans through their college or university, the U.S. Department of Health and Human Services announced in a conference call Wednesday.
Steve Larsen, director for the Center for Consumer Information and Insurance Oversight at the department, said the proposed regulations would prevent university and college insurers from:
• denying coverage based on pre-existing conditions to students age 19 or under
• placing lifetime limits on health care
• dropping coverage due to an error in paperwork
• using less than 80 percent of revenues generated by premiums on health care
“One of the most vulnerable groups of Americans in our old health insurance system is young adults,” Larsen said.
Aaron Smith, co-founder and executive director of Young Invincibles, an advocacy group for young adults, said the proposals represent a “major victory” for young people.
“This win happened because young people spoke up,” Smith said.
Larsen said the regulations, if finalized by the department, would not take effect until the beginning of the 2012-13 academic year.
“We wanted to get it out now to give the universities a heads up as to what’s coming,” Larsen said.
Steven Bloom, director of government relations at the American Council on Education, said some insurers have already raised premiums, even though the proposals would not go into effect until next year.
“We hope this isn’t a trend,” Bloom said.
At Ohio State, about 15,000 students are enrolled in the comprehensive health insurance plan, and about 4,000 enroll in the supplemental plan in addition to the insurance they already have, said Diane Plumly, director of Student Health Insurance.
According to the Student Health Insurance website, the annual premiums for the comprehensive plan and the supplemental plan are $1,629 and $187, respectively, for domestic students for the 2010-11 school year.
Plumly said the student insurance program operates on about $32 million a year.
“That is used to cover costs of providing health care to students, claims and administrative costs,” Plumly said.
The proposed regulations will not have much of an effect on OSU’s plans, Plumly said.
“We offer a pretty comparable plan,” she said. “The goals of the HHS are consistent with our goals.”
OSU does not deny coverage based on pre-existing conditions, Plumly said. But the plan does have a lifetime cap of $500,000, and annual limits on physical therapy, chiropractic services, prescription drug coverage and some preventative services.
Under the proposals, annual limits on care will be phased out and all preventive care must be free.
Also in the proposal is a regulation preventing insurers from using less than 80 percent of revenue generated from premiums directly on health care costs.
Plumly said that percentage, called a medical loss ratio (MLR), at OSU is “close to that.”
“Some years it’s more, some years it’s less,” Plumly said. “I would say the average is just below.”
Eric Seiber is an assistant professor of health services and management policy in OSU’s College of Public Health. He said the measure is likely to raise premiums nationally.
“Anything that increases health care coverage increases premiums,” Seiber said. “It’s a trade-off between access versus costs.”
Seiber said premiums will increase because insurers kept them “artificially low” by dropping coverage for a few people when one person needed health care.
But the effect at OSU will not be significant, Seiber said, because the increase in costs for the insurers will be spread out among more than 15,000 students.
“There’s such a big pool of students,” Seiber said. “It’s probably going to affect us the least out of almost any university.”
The Lantern reported on March 30 that OSU’s tuition and fees increased by $741 from autumn 2009 to autumn 2010.
“If this is going to increase expenses by $1.5 million, it will raise premiums $100 (for the year),” Seiber said. “Compared to tuition, that’s not much.”
Kristin Hogan, a third-year in human resources, has a supplemental plan and said she would be willing to pay $50 more per year in order to extend benefits to more people.
“If it’s going to help people, I’m all for it,” Hogan said. “Health care in America sucks right now, and we need to start somewhere.”
On Jan. 19, the new republican-led House of Representatives voted to repeal the health care law along party lines, 245-189. The Senate, where democrats hold a slim majority, struck down the repeal, 51-47.
Ohio Rep. Steve Stivers and Sen. Rob Portman, both first-term republicans, voted for the repeal measure. Sen. Sherrod Brown voted against it, joining fellow democrats and one independent.
House majority leader Eric Cantor, R-Va., told reporters on Tuesday he expects the House to vote next week on a measure prohibiting government money from being used to carry out the law.