Obamacare edges out college health plans with costlier coverage
by Laura Edghill
Posted 3/31/15, 11:23 am
Increasing numbers of college-bound students are being forced off campus in their search for affordable health insurance. And many are finding their options under the Affordable Care Act aren’t as cheap or as good as the plans their schools used to offer.
Although Obamacare allows parents to keep their adult children on the family insurance plan until they are 26 years old, not all students have that option. Those who need their own insurance are stymied by Obamacare’s prohibition against using premium tax subsidies to purchase insurance from universities. Others have found their schools have dropped health insurance coverage altogether, driving students to surf the health insurance exchanges, apply for Medicaid, or give up entirely and pay a penalty instead.
While some students may end up with better deals off campus, some college officials and advocates worry about the others, particularly at schools that are dropping health insurance entirely.
“I’ve heard of instances where schools are thinking about it, but they are reluctant, particularly in instances where states declined to expand Medicaid,” said Steven M. Bloom, director of federal relations for the American Council on Education, a Washington, D.C., group representing the presidents of U.S. colleges and universities. If too many colleges and universities get out of the health insurance business, Bloom said, vulnerable students will risk going uninsured rather than sift through alternative options.
Other college officials expressed similar concerns, but with more optimistic projections.
“I actually went into the exchange myself and did a bunch of ‘what ifs’ to see if this was actually a better deal for them. In many cases it is,” said Stephen Bolyai, vice president for administration and finance at William Patterson University in Wayne, N.J. Bolyai managed the school’s process for dropping student health insurance. He admitted initial concerns about vulnerable students but was encouraged by the options he found when he investigated the exchange himself.
But college officials are quick to point out the health insurance offered by most universities is superior to Obamacare’s “silver” standard plan.
“Student plans provide ‘gold’ or ‘platinum’ level coverage at a ‘bronze’ price,” said Richard Simpson, student health insurance manager at the University of Wisconsin-Madison. “We believe that in the vast majority of cases, student insurance is the best option.” College plans give students more coverage for their money, frequently have low deductibles, and are more flexible than some state plans bought on the exchanges, Simpson said.
Even when faced with a number of competing options, some students still struggle to afford coverage.
Levi Huddleson, a telecommunications major at Ball State University in Muncie, In., has not had health insurance since 2012. He considered buying student health insurance but found it would cost more than he could afford with his part-time job.
Huddleson said his parents are retired and cannot afford to pay for his health insurance, his tuition, or other bills. He currently makes too much money for Medicaid but too little to afford the $166 a month premium he found by searching the federal exchange.
“I cannot afford it, so it is definitely not by choice,” Huddleson said. “I considered buying it, but just taking the hit and paying the penalty was significantly cheaper than either option. Luckily, I’m young, and I don’t have any serious pre-existing conditions.”
The Associated Press contributed to this report.
Laura is a freelance writer, church communications director, and public school board member living in Clinton Township, Mich., with her engineer husband and three sons. She is a graduate of the WORLD Journalism Institute's mid-career course. Follow Laura on Twitter @LTEdghill.