Student health insurance cost to rise with reform

New coverage mandates in the law may drive costs up for students.

Sarah Nienaber

Mandatory health care coverage isnâÄôt something new for University of Minnesota students.
The University placed a mandate for all students to have health care coverage in the 1970s, which makes the federal health care reform a relatively easy transition at the University.
The reform, signed into law in March, will not have as many administrative changes for student health insurance as it does for employer-sponsored plans, but because limits on pharmacy costs must be eliminated and preventative care measures must be implemented into plans, premiums for student insurance plans will likely increase.
This is something nutrition graduate student Xiaochun Wang said would be harder to afford.
âÄúItâÄôs reasonable right now because it covers almost anything and also if I want to buy medicine and drugs it covers a lot, so I think thatâÄôs reasonable,âÄù Wang said of her insurance costs through the University.
âÄúItâÄôs still a little bit high, so if itâÄôs raised again it will be even harder to afford,âÄù she said.
Premiums generally go up due to an annual increase in the medical cost of living, said Susann Jackson, director of student health benefits at Boynton Health Service. She predicted that next yearâÄôs increase for the plan would probably be about 2 percent and within the next five to 10 years would be somewhere between 2 and 8 percent total.
Jackson said if the cost of student insurance needs to be raised, the Office of Student Health Benefits does what it can to keep the percentage increase in the single digits.
Right now, students pay $930 per semester for insurance.
As with employee health insurance, many unknowns still revolve around the effects the health care reform may have on insurance for students. Edward Ehlinger, director and chief health officer at Boynton, said this comes from the legislationâÄôs lack of consideration for student health insurance.
âÄúThere is very little definitive in the legislation that talks about student plans,âÄù he said. âÄúThe unknowns that we have are markedly greater than the unknowns that the employee plans have.âÄù
Ehlinger said the federal health care act includes only a short entry concerning student health coverage. The possibility of repealing the legislation, which some Republicans and some Democrats have raised, poses questions as well.
Regardless of these unknowns, Ehlinger said there is great benefit for students when it comes to shopping for health care coverage. Colleges and universities will be able to offer higher quality plans that will allow students to be placed in a pool with peers their age who have limited health problems, he said.
âÄúWe see it as an opportunity,âÄù he said. âÄúWe think weâÄôll be able to provide a better quality plan at a lower price than what the exchanges can offer.âÄù
Another opportunity Ehlinger sees is a relief in pressure on student service fees by the current insurance
system. He hopes that because preventative care will be included in insurance plans, Boynton will have to ask for less from student services fees, which is where that money comes from now.
For the 2010-11 school year, students paid $118.13 a semester in student services fees specifically for Boynton.
The transition doesnâÄôt come without changes, however.
Health care reform burdens the industry with the costs of preventative care and other restrictions, which causes individualsâÄô costs to go up, Jackson said. This is how the reform equates to more expensive University-sponsored student health plans, she said.
Jackson explained that high-deductible plans offered outside the University mean lower monthly premiums, which looks very appealing to students, who are mostly low-income. Because of this, many students may try migrating to these other plans to save money on a monthly basis, taking the risk that they wonâÄôt get sick and need health care, she said.
When students do get sick, though, a higher deductible may be one they canâÄôt afford, Jackson said.
The University health care plan doesnâÄôt have deductibles.
Jackson boasted that the UniversityâÄôs student health plan was one of the most comprehensive of its kind in the country. She cited health care giant Blue Cross/Blue Shield, which admitted that if it was to offer an equivalent plan, it would cost about 25 percent more than what the University charges because of the administrative cost-saving techniques that have already been developed by the University.
âÄúWeâÄôre already very efficient,âÄù Jackson said. âÄúWe know weâÄôll be able to compete with those plans. However, are students going to be informed enough to realize that their student health plan is going to be the best buy?âÄù
Giving the best coverage for the dollar is one of the goals of the UniversityâÄôs health coverage plan. Operating in a fiscally responsible manner is one of the others, Jackson said.
âÄúHealth care reform is not in the best interest of students,âÄù Jackson said, âÄúbecause it promotes those high deductible plans.âÄù