Improving Health Insurance Protections for Students

The Affordable Care Act gives all Americans greater freedom and control over their health care decisions through new benefits and consumer protections.  And proposed rules released today make clear that students who purchase health insurance through their college or university will also benefit from the new consumer protections in the law.

Improving Coverage for Students

According to some estimates, as many as 3 million students are covered through student health plans offered by colleges, universities, or other institutions of higher education.  Student health plans are often purchased when family coverage is not available.  However, not all student health plans are the same.  Some plans are comprehensive but others may offer limited benefits, which can put students and their families at risk for catastrophic medical bills.  In addition, these plans are treated differently depending on how and where they’re offered, which has created a patchwork system of regulation for these plans that makes it difficult for students and their families to understand what their plans cover and their rights as consumers.

Today, the Department of Health and Human Services (HHS) has issued a proposed regulation that would ensure students enrolled in these plans benefit from important consumer protections created by the Affordable Care Act by clarifying that these plans would be defined as “individual health insurance coverage.” 

New Consumer Protections

Under this proposed regulation, many students who buy insurance through their college or university would be given the same rights and protections as other Americans under the Affordable Care Act, including the Patient’s Bill of Rights.  For example, insurers can no longer impose lifetime dollar limits on the amount they spend on health benefits; drop coverage when enrollees get sick because of an unintentional mistake on an application; and insurers cannot deny or exclude coverage for students under age 19 because of a pre-existing condition. 

Helping Students Keep Their Coverage

Today, some student health plans, only offer limited benefits with low annual dollar limits on health care, or have limited networks of doctors, and other health care providers. For many students, these health plans are their only health insurance option. 

The Affordable Care Act allows HHS to take steps to preserve market stability and ensure student health plans remain affordable until all Americans have new coverage options through the State-based Exchanges that will be established in 2014. Under the proposed rule announced today, student health insurance plans would be allowed to have annual dollar limits on essential health benefits of no less than $100,000 for policy years beginning before September 23, 2012.  Student health plans with policy years beginning after that date must fully comply with the Affordable Care Act’s annual limit restrictions. 

HHS also is requesting comments on how other Affordable Care Act protections apply to student health plans, including the choice of medical provider and application of the new medical loss ratio rules.

Ensuring Transparency

The proposed rules would require insurance companies to tell students enrolled in student health plans whether or not their plan meets the new requirements laid out under the Affordable Care Act—bringing unprecedented transparency to the student health insurance market.

Health Plans that are Affected

Student health plans that will now be considered “individual health insurance coverage” include those that meet the following criteria:

• Plans provided by a college or university through a health insurance company. (This excludes health insurance plans for students that are self-funded by the college or university.);
• Plans that are only available to students enrolled in the college or university sponsoring it, as well as their dependents; and
• Plans that are available to students regardless of their health status. 

Posted: February 9, 2011