While the final shape of federal health care reform remains uncertain, the four proposals pending in Congress would require many uninsured college students to obtain insurance and extend the age through which they remain on their parents’ policies.
The overhaul will have significant impact on young people in both the short and long term, yet few students have kept informed about the nation’s complex health care system and Washington’s efforts to restructure it. Questions persist on how these bills will affect college students.
Divergent proposals
Three pieces of legislation, each proposed by different committees, are now working their way through Congress. Although all three would require individuals above a certain income level to have health insurance, they differ in how they will affect young adults in particular.
The House version would impose a fine of 2.5 percent of adjusted gross income on uninsured people. It would establish a government-run insurance plan, known as the “public option,” as well as nonprofit cooperatives.
The Senate Committee on Health’s bill would authorize an individual penalty of up to $750 per year for inadequate coverage. It would also create a public option and increase the age limit for dependent coverage—which currently varies by state—to 26.
The Senate Finance Committee’s bill would fine uninsured individuals with incomes above the federal poverty level up to $950 a year starting in 2013. It would create “young invincibles” health plans geared towards people younger than 26, which would provide low-cost catastrophic illness insurance. The Finance Committee plan is unique in that it would not create a public option, instead establishing nonprofit, consumer-owned insurance cooperatives.
Senate Majority Leader Harry Reid (D-NV) is pushing the Senate to include the public option in its final bill. But with almost every Republican opposed to the idea, Reid will need the votes of all 60 members of the Democratic caucus. Meanwhile, House Speaker Nancy Pelosi (D-CA) and House Democrats presented their own 1,990-page proposal, which includes a government-run public option, for floor debate on Oct. 29.
On Tuesday, House Republicans drafted an alternative bill, which would not require people to buy insurance or employees to offer it, and would not prevent insurance companies from denying coverage based on pre-existing conditions. This bill is not expected to pass, because Republicans do not have a majority in either chamber of Congress. Its purpose is for the GOP to spell out its disagreements with the Democratic plans.
Short-term impact on students
In the short-term, the pending legislation would require everyone—young and old, healthy and sick—to buy insurance, so that an already overburdened health care system won’t be further overloaded with uninsured individuals.
“You’ve got healthy people and you’ve got sick people, and everybody’s paying in at the same rate,” said Michael Russo, a health care advocate and staff attorney for the California Public Interest Research Group. “And so nobody’s really being forced to shoulder more than they can really carry.”
The Senate Finance Committee bill is the only version that doesn’t include a government-run insurance plan, a controversial measure Russo called “one of the biggest cost-savers that’s out there.” By competing with private insurers and driving costs down through a bigger negotiating pool, Russo said the public option could save the country between $800 billion and $1.8 trillion over 10 years.
Some experts argue that health care premiums have skyrocketed because insurance companies are too weak and there is too much competition. According to this argument, insurance companies that dominate a certain region have more leverage in negotiating down payments for hospitals and doctors, while more competition forces smaller companies to settle for higher costs. A competing government plan, critics say, would only exacerbate the situation.
“To the extent that insurers have bargaining power and are able to push for better management of care, that’s a good thing,” Russo responded. “But I certainly don’t expect them [the government] to be able to do it magically by themselves.”
The Finance Committee proposal is the “weakest bill from a young person’s perspective,” said Aaron Smith, a spokesperson for Young Invincibles, a health care reform group advocating for 18- to 34-year-olds. Smith said Young Invincibles is “very opposed” to the Finance Committee plan because of the high deductibles it sets—fixed amounts of money one has to pay before reaping the benefits of one’s insurance policy. He also pointed to the bill’s lack of a public option and subsidies for low-income families as reasons it is not favorable for young adults.
Although many states’ existing laws allow young adults to be covered under their parents’ plans, Smith said the House bill, by extending this age limit, is particularly strong.
But a major problem with youth staying on parental plans is that many campus health centers do not accept them. Columbia and Barnard are exceptions.
“That’s all well and good, but the problem is that the vast majority of campus health centers do not accept outside health insurance as payment for services rendered,” said Jim Boyle, president of College Parents for America. “So it doesn’t do a lot of good to be able to stay on your parents’ plan if the campus health center doesn’t take it.”
Many colleges, including Columbia and Barnard, require students to have health insurance during the academic year. According to a 2008 report by the Government Accountability Office, about 30 percent of colleges nationwide and 71 percent of four-year, private, nonprofit institutions have such requirements. Columbia requires full-time students to be covered by the school’s insurance plan or an outside policy; students are automatically enrolled in the basic University plan unless they submit a waiver by Sept. 30 showing they have adequate outside insurance.
Boyle called on Congress to require all colleges to accept students’ outside insurance, noting, “Very few campus health centers do accept private insurance—certainly less than 10 percent.” He said that while many schools do not accept outside insurance because it would be an “administrative nightmare” to handle billing for all the different insurance providers, colleges can outsource this task to external billing companies.
The Finance Committee bill was initially ambiguous about campus health plans. The Oct. 2 version of the bill classified all health plans as employer-based or individual policies, and restricted people from using “limited duration products,” or insurance plans purchased for only a short time. In 1996, the Health Insurance Portability and Accountability Act had labeled college-sponsored plans as “limited duration products.”
That “startled” the American College Health Association, according to Barnard Health Services Director Brenda Slade. A week after the bill was released, ACHA sent a letter to the Finance Committee asking for clarification that “nothing in the proposed legislation is intended to, nor will inhibit or preclude the continuance of college sponsored (or college self-insured) student health insurance plans.” The Committee subsequently provided that guarantee.
Long-term impact on students
While the individual mandate will likely be beneficial for students who need insurance but can’t afford it, for the majority who are healthy, it might seem like a quick fix that doesn’t address the larger issue of cost. Studies by the Kaiser Family Foundation have shown premiums nearly doubling in the last decade and growing at twice the rate of wages and inflation in 2006.
“The number one problem in the health care system right now is that premiums are set to basically double over the next eight years,” Russo said. “Right now there’s no escape valve, and it [cost] is going to keep going off the rails.”
There are several provisions in the proposed bills that could staunch rising costs. The Senate Health Committee and House bills grant the Secretary of Health and Human Services the power to bundle individual medical payments into larger reimbursements for hospitals and doctors. The idea is that by not paying facilities and health care providers separately on the current fee-for-service basis, doctors will have no incentive to perform unnecessary procedures. Costs would decrease, and quality of care would improve.
Russo noted that the bills would also prioritize unbiased research not funded by pharmaceutical and medical device companies, so doctors and patients would be better informed about the costs and benefits of generic versus brand-name drugs.
“It’s probably not much of a surprise that they [industry-funded research] tend to be biased in favor of those particular drugs and devices,” Russo said. “That bias is in the direction of the newest drugs, which have the highest cost.”
Through extensive lobbying, the pharmaceutical industry has “made their deal early” and “are getting off a little bit lighter than most reform-minded people would like to see,” Russo said.
The uninsured college student
According to the Government Accountability Office, 20 percent of college students aged 18 to 23 were uninsured in 2006. But Lookout Mountain Group, a nonpartisan organization of college health professionals who call college students the “invisible minority” in the health care debate, reported in June that the real number is much higher: 36 percent when students older than 23 are included.
These figures are unsurprising given the confidence young people have been shown to have in their health. A June 2008 report by the Urban Institute, a Washington, D.C.-based think tank, showed that 70 percent of adults aged 27 to 64 strongly believe health insurance is necessary, while only 48 percent of those aged between 19 and 26 do.
Students who have little or no health insurance coverage often neglect to see specialists, fill prescriptions, or get routine checkups or mental health care. If an uninsured student incurred catastrophic health expenses, he or she could be saddled with debt and forced to withdraw from college. The cost would then fall on the insured population in the form of higher premiums, especially in places where college students make up a large part of the population.
The GAO study also stated that non-white students and those from lower-income families were more likely to be uninsured. Young Invincibles supports the House and Senate Health Committee bills because they include larger subsidies for low-income families than the Senate Finance legislation.
The situation usually worsens after students graduate. The GAO found that 67 percent of college students were covered by employer-sponsored plans, with most listed as dependents on a parent’s policy. Most Barnard students are covered under their parents’ policies, according to Slade, and full-time students covered by their parents’ plans are typically insured until age 22.
But many recent adults, burdened with other expenses such as car payments and rent, choose to go without insurance. One in three graduates were uninsured at some point in their first year after college in 2007, according to the Commonwealth Fund.
Columbia offers graduating students who are enrolled in a school health plan a chance to extend their policy for up to one year. But the cost of an individual Columbia plan is more expensive than the average individual premium: $6,111 a year compared to an average of $3,991 as reported by a 2005 government study.
Many states have increased the age up to which young adults can remain on their parents’ health insurance. Since September 2009, New York has allowed unmarried young adults who are not eligible for employer-sponsored insurance to be covered under their parents’ policies until age 30.
Impact of the recession
Experts say the recession and increased competition in job markets will cause fewer people to have access to employee-sponsored health insurance and add to the growing number of uninsured people.
According to the U.S. Department of Labor, 15 percent of 20- to-24-year-olds were unemployed in September 2009, compared to 11 percent in September 2008. Compounding the problem is the fact that many parents are also losing their jobs, and thus losing health coverage for their children.
“There is some evidence that the number that want the optional [supplemental student health insurance plan] is going up, perhaps because their families are losing their insurance, and that’s obviously a big concern of ours,” Slade said. “If you don’t have family insurance or there’s a chance you might lose your family insurance, we strongly urge you to buy the optional.”
The impact of health care reform on campus health plans and youth as a whole remains uncertain until Congress reconciles the four proposals. In the meantime, many campus health centers are actively monitoring the debate on Capitol Hill.
“The American College Health Association is a very active lobbyer,” Slade said. “They’re all over Washington.”
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