College students who like their health insurance plans may not be able to keep them, reports The Wall Street Journal. A number of higher education institutions have chosen either to cease offering health plans to students or have informed students that they should "expect sharp premium increases because of a provision in the federal health law requiring plans to beef up coverage."
The Journal's report leaves no doubt as to the cause of the change: "The demise of low-cost, low-benefit health plans for students is a consequence of the 2010 health-care overhaul." The article tells the story of how one college administrator decided to stop offering inexpensive, capped-payout plans to his school's students:
Bethany College in Lindsborg, Kan., this past year offered a 12-month plan that cost students $445, while capping payouts at $10,000. For the 2012-13 academic year, the Obama administration said the payout cap must be at least $100,000. Bethany said students would have had to pay more than $2,000 to get that new level of coverage.
"We decided not to offer coverage for our students next year given the proposed increase in premium," said Bob Schmoll, Bethany's vice president for finance.
Mr. Schmoll said his school wished it could have kept the limited-coverage plan, which he said was a "fairly robust program for the type of need that most students of that age have." Even the old premium was "for many a struggle to pay," he said. Students previously had to sign up for the school's plan if they didn't have other insurance. Now students won't be required to have health coverage.
The new rules are likely to affect a broad swath of American colleges, particularly small ones. Some 60% of schools' plans had coverage of $50,000 or less for specific conditions, and almost all of the rest had some sort of payout caps that they will have to do away with by 2014, the GAO study found.
Several other schools have also announced that they will no longer offer certain student health plans as well, according to the article.
The Obama administration can't say they weren't warned about colleges dropping student health plans long in advance. In the summer of 2010, just a few months after the health law passed, the American Council on Education warned the White House that millions of student plans offered by schools could disappear thanks to the law.
Instead, Health and Human Services representatives are arguing that those plans were so crappy they weren't worth keeping. "Given today's health system," the plans "wouldn't represent a good value," Michael Hash, director of the Office of Health Reform at the Department of Health and Human Services, tells the Journal.
Those silly college kids! What were they thinking? They obviously didn't really want those low-cost health insurance plans. They just needed the Obama administration to help them understand that the plans were worthless junk.
Others, however, are not so unfortunate to have administration health bureaucrats looking out for them. Even though HHS argues that the low-cost plans that are being pushed out of the market are so utterly lacking in value that there's no cause to be worried by their disappearance, the agency is also issuing special waivers allowing some organizations to continue offering the plans on a case-by-case basis. Back to the Journal:
Some unions and employers can still offer plans to lower-wage hourly workers that have limited benefits similar to those of the student plans, because they were given waivers by the administration allowing them to continue those plans until 2014. Schools can't apply for the same waivers for student plans.
A White House web page is still promising that the health law will help put Americans "in control of their health care," giving them "more choices" and making coverage "more affordable."