If you're a college student who acquires health care through your school, and you're following media coverage this week surrounding President Obama's health care reforms, your head might still be spinning in alarm right now.
Right-leaning commentators cooked up some juicy, almost gladiatorial headlines in the past few days: "Students' health plans might well be ON THE CHOPPING BLOCK!" (The Weekly Standard, emphasis mine.) "ObamaCare THREATENS college health plans!" (The Atlantic, emphasis mine again.)
All of this agitation stems from a concerned letter the American Council on Education (ACE) sent to Health and Human Services Secretary Kathleen Sebelius on Aug. 12 -- but there's little reason to believe the missive warrants the stink it made on political blogs this past week after MSNBC's Julie Applby brought it to light in a recent piece. As much as I hate to interfere when conservative writers get some good old-fashioned partisan rancor boiling in their bellies, I feel the need to provide some Pepto in the form of actual language from President Obama's Affordable Care Act (ACA):
"Nothing in this title... shall be construed to prohibit an institution of higher education... from offering a student health insurance plan, to the extent that such requirement is otherwise permitted under applicable Federal, State or local law." (From ACA Section 1560.)
Sounds pretty clear, right? Then again, I know things rarely turn out simple when it comes to an issue as complex as national health care reform, so I decided to consult an expert. I asked Nicholas Newsad, a published author who holds a master's degree in hospital service administration. Newsad has written a number of articles on managed care and health care revenue cycle management for publications such as the Healthcare Financial Management Association -- and he referred to the claims that health care reform will kill off student insurance plans as "baseless."
"[The media] blew this letter way out of proportion," Newsad said. "I think a lot of it is just the desire to have a catchy headline to grab people's attention. All [the ACE] is asking for in this letter is some clarification to make sure that student plans don't fall through the cracks in the new definition of 'minimum essential coverage.'"
In the letter, the ACE expresses two basic concerns about college health plans with respect to the President's reforms. First, they worry that school-sponsored plans might not meet the definition of "minimum essential coverage" because students plans have historically been classified as short-term, limited-duration policies. The new law requires individuals to acquire either an individual or group insurance plan or face a $750 tax penalty -- and the ACE frets that a short-term policy just won't meet these criteria.
However, Newsad noted that the Affordable Care Act also states that the HHS Secretary (in this case, Sebelius) may identify other types of acceptable "minimum essential" plans besides employer and individual plans. Given the language in the bill that specifically protects student health plans, he said that students hardly need to worry that their plans won't make the cut.
"I can't imagine or fathom that the government would penalize college students who have health insurance through their school with a $750 [fine]," he said. "And that claim is irrational, because it clearly states in the bill that nothing will prohibit a college from offering a plan."
The ACE's second concern is that certain provisions in the Affordable Care Act will prohibit schools from offering their plans only to students, rather than to the market at large. If schools open their plans, which generally don't inquire into the general health and pre-existing conditions of enrollees, to the general public, it could cause a massive spike in premiums.
However, Newsad said this could only happen if the government decides to classify student plans as individual policies rather than group policies. Since school plans rate their policies on a campus-wide basis (i.e., as a group), he said that schools won't be forced to open up their plans to the ailing masses any more than employers will.
"The writers of these articles have taken this to an extreme," he said, "because there's no reason to assume schools would have to offer their plans as an individual policy. A student plan is the definition of group health insurance."
In other words: Blame the media for a case of Health Care Hysteria, treatable by taking a Chill Pill.
Still, other observers contend that new payout requirements in the health care reform bill will cause insurers to raise premiums on student plans across the board, or even withdraw their plans from colleges entirely. I wrote about these reforms in July, when I noted that changes in the requirements for the Medical Loss Ratio (MLR) would require student insurers to pay out 80 percent of the premiums they take in as benefits, rather than socking the majority away as profit.
My response to those who criticize this particular provision: Poor, poor insurance companies. I find it difficult to work up much sympathy for their trimmed margins after an April investigation by New York Attorney General Andrew Cuomo concluded that many student plans place students "at risk while providing massive profits for insurance companies."
Newsad agreed, saying that if insurance companies couldn't create a workable plan for college students under the new law, "then [they] won't be able to come up with a plan for anyone."
"If anything, the health care reform act will lower premiums," he said. "Students rarely use their plans, and if insurance companies have to spend 80 percent of their premiums on care, all the profits that third parties are taking in from these student plans will shrink."
"If health insurance companies stop offering plans to college students," Newsad added, "then I should probably go into the insurance business myself and start marketing to college students, because there's no more profitable group for them to insure."
In other words, none of this fervor over the culling of students' health plans amounts to much of a story. Conservative opponents to health care reform have generally made it clear that they'll take to any perceived weakness in President Obama's bill like a pack of predators to a fresh kill.
But in this case, it looks like the wolves cried wolf.
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