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Benefits seen to college students of new health law

Published: October 7, 2011
Section: Front Page


The number of insured 19 to 25 year olds has risen dramatically since the Affordable Care Act passed in 2010, even as a greater number of young people find themselves unemployed after graduating. The new health care law allows parents to keep their children as dependents on their health insurance until they are 26 and has allowed 20-somethings to breathe more easily when looking for a job or continuing school.

In the first three months of 2011, 900 thousand more 19 to 25 year olds had health insurance compared to 2010, according to a study from the Centers for Disease Control and Prevention referenced by The New York Times last month.

Prior to the ACA, students were unable to stay on their parents’ insurance after completing their undergraduate degrees.

The national health care reform signed into law by President Obama last year has led to tense political rhetoric and partisanship, including arguments about whether the government can use an individual mandate and require citizens to purchase health care. The Supreme Court is expected to hear cases challenging the constitutionality of the law and reach a decision by June.

Michael Dukakis, former Massachusetts governor and 1988 Democratic nominee for president, defended the law Wednesday evening during a discussion with students at Brandeis.

“The American people should be for this thing,” Dukakis said, posing the key question as “will working people and their families share decent, affordable health care in America?”

A Commonwealth Fund survey reported 45 percent of young adults delayed medical care because of cost this year alone. Out of necessity, they were the “Young Invincibles,” willing to gamble that they would not need a doctor.

“For young adults as a group, prior to the ACA, those who were not fortunate enough to land jobs with employers that offered health insurance, many of them chose not to buy coverage at all because rates are so much higher in the individual insurance market and because, as young people, they tend to be quite healthy,” Professor Michael Coiner (ECON) said.

Now that they are able to have coverage under their parents’ plan at a far less expensive rate than they would by themselves, reports are finding that the youngest group has been signing up so quickly they have surpassed their elders in the percentage of insured.

“Students with parents who don’t have health care will still need college insurance,” Professor Stuart Altman (HS) said. “Colleges would need to change some of the kind of insurance they make available” in order both to compete with commercial policies and expand coverage to fulfill their new obligations to the law.

The ACA will force many campuses to improve their own health plans, the quality of which has been questioned, according to John Holahan of the Urban Institute, increasing coverage of prescriptions and treatment. Student plans offered by colleges will qualify as individual market plans beginning in January, granting students greater consumer protection and flexibility, and must now offer coverage regardless of health status, which will provide far greater protection from major health care costs. Lifetime caps, the maximum amount insurance companies will pay on a policy, will also be eliminated, allowing more security for students in case of catastrophe, says U.S. News in a report early last month. Many students, who now qualify with their parents’ insurance, will forego the campus medical plan, but whether the decrease in total cost to the university will be large enough to affect costs is unclear.

For many with chronic illnesses—approximately one in six of all young adults, according to the U.S. Department of Health and Human Services—skimping on health care is not a feasible option. Often the rates for those with chronic conditions were extremely prohibitive. The ACA ensures that universities cannot deny coverage to those with pre-existing conditions and also prevents companies from turning away those younger than 19. Outside of the universities, many states have begun to enact programs to assist those unable to find coverage and, by 2014, when the ACA will take effect in its entirety, discrimination based on pre-existing conditions will be prohibited.

Many fear that the ACA will increase premiums, but as the proportion of young adult subscribers increase, the cost per person would hypothetically drop.

The ACA is only responsible for “1 to 2 percentage points” of the recent increases in premiums, according to remarks by the president of the Kaiser Family Fund, Robert Altman, in a press conference last September.

“Being forced to cover these young adults will increase the payments they have to make in total … but, by including everyone (or just about everyone) in coverage, per person costs will fall,” Coiner said.