HHS Pressured To Apply Health Reform’s Consumer Protections To Student Health Plans

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http://wonkroom.thinkprogress.org/2010/10/25/college-plans/

Approximately 4.5 million college students nationwide receive health insurance coverage through so-called student health plans (SHP) — insurance that is available to college students — and if progressive advocates get their way, these plans will have to abide by the federal consumer protections in the Affordable Care Act, which prohibit insurers from denying coverage to individuals with pre-existing conditions, rescinding coverage, or placing annual or lifetime caps on benefits. Following an investigation by New York Attorney General Andrew Cuomo, which found that some college plans offer porous coverage that skirs state laws and regulations, youth organizations like Rock the Vote and Young Invincibles sent a letter to White House and the Department of Health and Human Services (HHS) asking regulators to ensure that SHPs abide by the regulatory baseline created in the Affordable Care Act.
(http://www.nytimes.com/2010/04/09/nyregion/09college.html)

The crux of the matter is whether HHS (which has regulatory authority over the plans) classifies SHPs as individual health plans — thereby requiring that they abide by the consumer protections in the law — or limited duration plans, potentially exempting them from the new federal standards. In their letter, the groups argue that the latter approach would “leave these plans virtually unregulated,” “exempt from even the most basic protections”:

Some groups have suggested defining student plans as “short-term limited duration insurance.” However, student plans do not fit into the definition of “short-term limited duration insurance.” Moreover, because this type of insurance is generally considered neither individual nor group insurance, there is a strong argument that such a definition would leave these plans virtually unregulated by the PPACA – a scenario clearly not within the intent of Congress.

Defined as “short-term limited duration insurance,” student health plans would arguably be exempt from even the most basic protections in the PPACA, including the:

- Ban on rescissions;

- Ban on discrimination based on pre-existing conditions;

- Limits on annual and lifetime benefit caps;

- Preventive care requirements;

- Minimum benefits package;

- Medical loss ratio requirements, among others. <...>

Indeed, student plans have not historically been classified as “short-term limited duration insurance,” under HIPAA, the PHSA, or any other federal statutory scheme – nor should they be. Student plans are often offered for a full 12 months. Moreover, they are almost always offered to any student who chooses to stay enrolled in a college or university. Additionally, any partial classification, leaving some shorter-term student plans regulated in this category, would merely encourage all student plan issuers to redefine their coverage as semester-based coverage, giving them a loophole through which to deprive students of important consumer protections. As such, any attempt to call student plans “short term limited-duration” plans would be both inaccurate and potentially detrimental to the well-being of several million students enrolled in them.

The American Council on Education — which represents presidents and chancellors of accredited educational institutions — and several other higher education associations disagree. They’re asking the government to “designate, in regulation, that student health coverage is considered minimum essential coverage under the individual mandate,” but argue that these plans have been traditionally seen as short-term limited duration insurance” and should be classified this way “(t)o avoid unintended consequences.”

“We believe that there is going to be coverage under ACA even under limited duration plans,” Steven Bloom, ACE’s Assistant Director of the Division of Government and Public Affairs told me in a phone interview. “The question is, tell us what they have to comply with under ACA.” The education associations do agree that the SHPs should be “made available to eligible students and their eligible dependents as defined by the policy without regard to health status or pre-existing conditions” and that they should meet the “actuarial standards of the Bronze Plan,” but do not go as far as Young Invincibles in demanding that they be required to meet almost of the requirements of individual health insurance plans.

Along with concerns that the law’s guaranteed issue and guaranteed renewability rules would undermine the plans’ student-only enrollment structure, Banson says that his group is also worried that issues like “pricing and rating” could undermine the policies. The law requires states to “establish 1 or more rating areas within that State,” but SHPs are priced differently, “based on campus population,” Banson told me.

Banson stressed that the higher education associations who signed on to the letter are not advocating against the new consumer protections. Rather they are asking for “guidance for what the rules of the road are” so “schools can understand what their student plans are required to comply with in the Affordable Care Act and what insurance reforms apply to student health plans.” Bloom says that even if these plans are “classified as limited duration plans it still means that students will have to purchase something that satisfied” the minimum benefits requirement under the law and would have to meet federal standards of coverage.

HHS is likely to issue the regulations in the coming weeks.