By Bryan A. Liang
While the Obama administration’s proposed regulations on college health plans have been hailed by some as “a win for students," the game is not over yet.
The Department of Health and Human Services, which issued the proposed rules last month, should be applauded for rejecting efforts by colleges and universities to characterize their plans as “limited duration” rather than as individual insurance plans. By doing so, the agency let colleges know in no uncertain terms that their school-sponsored health insurance plans (SHIPS) cannot avoid federal regulation and healthcare reform mandates, as their lobbyists had been pushing. However, while the proposed regulations are a good start, the Department must go further to ensure appropriate student protections and address student and family needs.
The fact is that the vast majority of college students do not sign up for SHIPs, as they are already covered through another plan. In almost all cases, these plans -- whether through a parent’s employer, on the individual market, or from a public entity -- provide better coverage than what is offered through the college. It would stand to reason then that, under health reform, students should be able to use their own private or public plan for their healthcare needs. As President Obama has stated repeatedly, “If you like your health care plan, you can keep your health care plan.”
However, these proposed regulations would leave President Obama’s promise unfulfilled. Why? Because these rules would continue to allow colleges, with very few exceptions, to refuse to accept non-SHIP health insurance as valid payment for services rendered at their campus health centers. Instead, students and/or their parents could still be forced to purchase a redundant health care plan at a cost that is not trivial. Indeed, despite the fact that college tuition is rising between 20-120% of the consumer price index, these plans require more cost-sharing than traditional private and public insurance, and they tend to be poor in overall service coverage.
Even colleges that don’t require students to purchase the SHIP plan would still be allowed to charge non-participants significantly higher out-of-pocket, non-reimbursable costs for campus health center services -- up to 500% more for preventive services in some plans. And note: schools can also hold student futures hostage: any unpaid charges can be grounds to refuse to let the student register, get transcripts, or graduate.
The result is a cruel irony: While the health care bill has been touted for allowing young adults to stay on their parents’ plans until the age of 26, the majority of college students would not be able to use these plans at their campus health centers, or would have to incur substantial out-or-pocket costs to do so.
As officials at the Department receive comments and move toward final implementation of the proposed regulations, they should consider adding the following protective provisions for students and their families:
- No student who utilizes his or her own insurance should have greater financial responsibility for any campus health center service than a student who is enrolled in the college health plan. This would address discriminatory practices that charge students hundreds of percent more if they do not pay for SHIP.
- Campus health centers should be encouraged to become in-network with non-SHIP insurers to address the needs of students and families with their own insurance.
- To limit student cost sharing burdens, the university should permit students to use the student health fee or general tuition fee for health services as a pre-paid co-payment or deductible.
- Any student with health insurance that complies with the benefits plans dictated by the health care law should not be required to purchase SHIP. Currently, most colleges with mandatory health insurance policies do technically permit students to waive SHIP, but many then put artificial barriers that defy common sense. For instance, at the University of Iowa, a student with unlimited coverage that complies with ACA, cannot waive SHIP if his/her deductible is more than $500.
- Medicaid-eligible students should be permitted to waive SHIP, and their federally mandated coverage should be accepted as payment for services at the health center. These students are participating in Medicaid because they are financially needy, so requiring them to purchase school-sponsored insurance defies logic.
In addition, it is imperative that these regulatory changes go into effect as soon as possible. Under the proposed rules, the regulations would not be fully implemented until the fall of 2013, which is 30 months away. From now until then, several million college students will be receiving their ongoing health benefits from employer-sponsored, individual or public insurance products but will not be able to access those services on campus.
Students must be healthy to learn. A key relationship to access to health is access to insurance. Without the ability to use insurance, students might avoid appropriate use of the health delivery system and limit their present and future opportunities. Regulatory implementation of college health reform must not only take into account poor SHIP plans and their regulation, but also fulfill the promise made by President Obama that those who like their private coverage can use it. Otherwise, the promise of consumer protection against some of the poorest quality plans will be left unfulfilled once again. And then the game really will be over.
Bryan A. Liang, MD, PhD, JD, is a distinguished professor of law and executive director of the Institute of Health Law Studies at the California Western School of Law. He is also a professor of anesthesiology and director of the San Diego Center for Patient Safety at the University of California at San Diego School of Medicine. He is author of the report, "Crisis on Campus: Student Access to Health Care,” which the University of Michigan Journal of Law Reform published last March. His views are his own and do not necessarily reflect those of the New America Foundation.