Q. I have heard that under Obamacare, my university’s health care plan for students has to offer better benefits than it did in the past – including the Affordable Care Act’s ten essential benefits with no annual or lifetime benefit limits. Is that true? Does that mean that the coverage is more expensive than it used to be?
A. Student health plans are required to meet most of the standards that apply under the ACA to plans sold to individuals and small groups.
Pre-ACA, many colleges offered very skimpy plans. They typically came with low premiums, but also with low annual and lifetime benefit maximums. They were fine as long as a student was healthy, but if he was in a car accident or diagnosed with cancer, the benefits could be quickly exhausted.
Now that colleges are offering plans with ACA-compliant benefits, annual premiums tend to be higher than they were in the past. And some colleges have simply opted not to offer coverage anymore, choosing instead to direct their students to the exchange (for Medicaid or a private plan, depending on the student’s financial circumstances) or to a parent’s plan, since young adults can remain on a parent’s plan until age 26. But in some cases, coverage offered by colleges is just as affordable as the plans available through the exchange, or even more so.
And although premiums are generally higher than they were prior to the ACA’s regulations, the fact that student plans now offer free preventive care offsets part of that cost. For instance, despite Rick Santorum’s claim that birth control costs “just a few dollars a year,” the truth is that contraceptives can be really expensive without health insurance, and the up-front costs for long-acting reversible contraceptives like IUDs is often prohibitively expensive without health insurance. Subtract the cost of contraceptives and other preventive care from the premium and it begins to look more affordable.