College tuition seems to go up every semester. We all know that the books that are required for classes at universities are expensive. The price of the student health insurance is about to increase. This is part of the Affordable Care Act, and it is to ensure that those policies will actually cover things that they are supposed to.
Have you heard of mini-med health insurance? These types of plans have been referred to as “junk health insurance”. A mini-med plan will cover very little of a person’s health care needs, because of the incredibly low caps that the plans come with.
Many stop paying for all of a person’s health and medical costs after a cap as low as $2,000 has been reached. A person could easily burn through that with one trip to the emergency room, or from a one day stay in a hospital. These plans do not fit the requirement set forth by the medical loss ratio, (which requires insurers to spend at least 80% of the money they get from premium payments on actual health care).
The Affordable Care Act has several regulations that work together to create better health insurance for everyone. For example, the mini-med plans are on the way out, and will not be allowed in 2014. Health plans are no longer allowed to come with an annual cap or lifetime cap.
Many universities and colleges were offering what amounts to “junk health insurance” to students. They are now being required to make changes to their student health insurance plans. The result is that the cost of the insurance is going to go up.
The good news is that the new student health insurance plans will actually offer a reasonable amount of coverage. It means that your college student will not blow through their insurance plans annual cap from one visit to the ER. It also means that the student health plans offered by colleges and universities will have to cover preventative care for your college student – without requiring a co-pay or deductible payment.
Some Catholic universities have tried to make it sound as though the reason why the cost of student health insurance was increasing was specifically due to the birth control coverage mandate. This is simply not true. The cost is increasing because the current student health insurance plans come with annual or lifetime caps, and are not meeting the medical loss ratio.
Starting July 1, student health policies have to cover expenses up to $100,000 of expenses annually. Policies that start in the fall must cover $500,000 of expenses annually. In 2014, all caps will be prohibited. According to the Government Accountability Office, most student health insurance plans, right now, come with a lifetime cap of $50,000.
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