Health

Six months after passage of the Affordable Care Act (ACA), health care reform has finally moved off the front pages of America’s newspapers and is no longer the lead story on the nightly news. But below the surface, the controversy and political fights over the issue continue to roil.

Evidence of that came when higher education was recently drawn into the fight. On August 12, the American Council on Education and several other higher education associations wrote to the Department of Health and Human Services and the White House Office of Health Reform to ask for guidance regarding key ACA provisions to ensure colleges and universities could continue to offer students affordable, high-quality health care plans.

The response by the news media, spurred by interest groups following the issue, was almost immediate, and in the last few months organizations ranging from The Wall Street Journal to the College Parents of America have mischaracterized our effort as an attempt to carve out an “exemption” or “waiver” from ACA requirements. Some groups have suggested that we actually oppose efforts to enhance the quality of student health plans, while others say we’re only in it for the money.

They couldn’t be more wrong. Read the letter for yourself.

First, colleges are not seeking either an exemption or a waiver from the law. Historically, student health plans have operated under federal law as so-called “limited duration plans” because they provide coverage for a specific time period and are neither employer-based group plans nor plans offered on the individual market. These programs are tailored to meet the primary care needs of students as well as additional services such as mental health coverage.

Each is priced according to the eligible campus population and provide coverage to all eligible students and their dependents, do not vary premiums based on an individual student’s health status, and typically do not impose pre-existing condition exclusions. They are particularly important for international and graduate students. In short, these plans provide coverage that is responsive to the unique needs of the student population.

While the law specifically states that institutions may continue to offer student health plans, ACA is silent on how the law’s new requirements affect these unique plans. Federal agencies will need to write numerous regulations to implement ACA. Our letter seeks to include among them regulations that clarify how student health plans can continue operating as “limited duration plans” under a structure that incorporates reforms in the ACA -- and not, as some claim, to elude those reforms.

Specifically, we have asked HHS to provide rules of the road on two key topics:

• What insurance reforms in ACA apply to student health plans? ACA includes many insurance reforms, such as prohibiting preexisting condition exclusions or other discrimination based on health status, but it is not clear which apply to student health plans.
• Assuming student health plans incorporate required insurance reforms and provide at least a minimum ACA-defined level of coverage, will that satisfy the individual mandate to purchase health insurance under ACA?

We seek answers to these questions now because although many of the reforms in ACA don’t take effect until 2014, a number of institutions will soon be negotiating with insurers for new long-term contracts that will define the benefit coverage of their student health plans through 2014.

Are we opposing efforts to enhance the quality of student health plans? Absolutely not. In fact, we are following the lead of the American College Health Association, which has a longstanding set of standards to guide colleges and universities in structuring high quality coverage for student health plans. We also believe ACA will inevitably lead to improvements in the quality of student health plans, which is important because while the majority of institutions offer health plans of high quality — some continue to lag behind and must be improved. The key for us is ensuring that the changes brought about by ACA will result in plans that are both high-quality and affordable.

It is also wrong to characterize our efforts as an attempt to shield a major higher education profit center. The money made off these plans by colleges are modest, and revenue — if any — is returned to campus health centers or used to help maintain stability in the premiums paid by students.

In short, student plans respond to the unique health insurance needs of undergraduate and graduate students. They provide coverage over a limited time period for students under the age of 26 whose parents are uninsured and nontraditional students who are too old to access their parents’ plans. In some instances, student plans offer better coverage than students can get under parental plans, especially if they’re going to college hundreds or thousands of miles away from their parents’ networks or parental coverage does not adequately cover out-of-network care, making it prohibitively expensive.

Colleges and universities recognize the importance of ACA’s reforms and want high-quality health insurance options for their students. We are confident we can work with the administration on a constructive solution to ensure students have access to affordable, high-quality health coverage that is consistent with the reforms in ACA.

In a recent “Views” piece, representatives of the American Council on Education argued that the higher education community is not attempting to “dodge the health care law” by seeking “clarification” about the application of Affordable Care Act (ACA) mandates to school-sponsored health insurance plans (SHIPs). The authors, Terry Hartle and Steven Bloom, said that ACE is only seeking guidance about ACA mandates for its members.

However, upon analysis, we believe that the authors’ assertions are incorrect. Under no federal regulatory scheme have school-sponsored health plans been deemed to be limited duration plans, and ACE, is, in fact, seeking a waiver from ACA mandates. Let us explain.

Under the federal code, “Short-term, limited-duration insurance means health insurance coverage provided pursuant to a contract with an issuer that has an expiration date specified in the contract … that is less than 12 months after the original effective date of the contract.”

In contrast, SHIP contracts signed between schools and insurers are typically one-year coverage contracts, not limited duration plans as defined by law. For example:

• United Healthcare states in some marketing messages to students and contractual language on policies that SHIP is a “one-year non-renewable term policy.”
• An Aetna Student Health SHIP vendor policy states that “Coverage for all insured students enrolled for the Fall Semester, will become effective at 12:01 a.m. on August 15, 2010, and will terminate at 12:01 a.m. on August 15, 2011.”

In addition, a ”clarification” of ACA provisions will not waive the applicable state provisions, further complicating the patchwork of uneven regulation and undermining student and parental protection as consumers in these states. This conflict provides an important basis to ensure that ACA’s mandates are followed, namely to create a unified regulatory system with an appropriate floor for beneficiary health care services that harmonizes conflicting legal definitions.

Historically, SHIPs have been treated by federal law as individual health insurance plans. As noted by the Department of Health and Human Services, “health coverage might be provided through an association or other group, such as groups of college students … it is still considered to be ‘individual’ health insurance ….”

Consistent with this policy, SHIPs are considered individual health plans under ACA, since they are not group plans. SHIPs are therefore subject to ACA individual plan mandates, which include free preventive care, medical loss ratio requirements of 80 percent, prohibition of discrimination based on preexisting conditions, the ban on lifetime/annual benefit caps, and other protections.

Through the letter to HHS, ACE seeks to avoid these mandates for their constituents, yet ACE claims that the higher ed community is not requesting a waiver. However, it wishes SHIPs to be considered “limited duration plan[s]” that “can continue to provide coverage under ACA without altering their design.” Quite plainly, ACE is requesting a waiver, both of SHIPs’ actual status as individual plans as well as ACA patient protection requirements.

These SHIPs should not be granted a waiver of any sort. In fact, SHIPs are exactly the types of low-quality plans ACA was designed to address, and across the country they are plagued with access problems, poor quality performance levels, and inappropriately low spending on health care services.

Let’s look closely at just one of ACE’s arguments, in which they indicate that SHIPs “typically do not impose pre-existing condition exclusions.” In fact, most SHIPs do have pre-existing exclusion elements that do not allow for coverage of pre-existing conditions until after a waiting period, usually three or six months after coverage is purchased. For example:

• A $2,152-a-year Aetna SHIP notes that only “persons who have remained continuously insured under this Policy or other Policies will be covered for any pre-existing condition.” The policy then goes on to list 45 exclusions.
• A Blue Cross/Blue Shield SHIP costs $1,598 and yet has only a $200,000 maximum benefit. "[T]here is a 12-Month preexisting condition exclusion period” and “the Plan will allow up to $500 per lifetime for Covered Medical Expenses related to all preexisting conditions combined.”

Perhaps the State University of New York at Stony Brook provides the most telling indication of pre-existing exclusions in SHIPs: it markets its SHIP by noting others’ limits: “Unlike most student health insurance plans, [our] SHIP does cover pre-existing conditions for our students.”

While ACE indicates that it is not opposed to efforts to enhance the quality of student health plans, its request to allow SHIPs to continue “without altering their design” only ensures continued low-level SHIP performance. Repeated analyses, including examinations by the New York attorney general (and now Governor) Andrew Cuomo and by the Government Accountability Office, have shown these are generally poor-quality plans that represent conflicts of interest between the school and student, and are not “responsive to the unique needs of the student population.”

Finally, granting a waiver for SHIPs will raise costs for a majority of students and parents. Since most students have their own insurance and pay for coverage through their parents, providing SHIP waivers will result in many students again having to purchase the redundant SHIP plans for services already paid for, increasing student and parental debt. College tuitions are rising 20-120% faster than consumer inflation; students and parents should not be subject to additional, avoidable, and redundant costs.

Instead, SHIPs should be subject to ACA standards and reach high performance levels as other schools plans have done. For example, some schools have been highly successful in revamping their SHIP programs, including institutions as diverse as Boston University with its extensive service levels and Brigham Young University with its 93 percent medical loss ratio.

Since ACA is a consumer protection law, SHIPs should not be permitted to avoid its requirements. Rather, schools should renew their fiduciary duty to students and parents by having SHIPs fulfill ACA requirements, attaining service and performance levels such as that of BU and BYU, and working to ensure that student health is designed to keep the most students at their books for the most amount of time. Only through this process will students be protected as the ACA intended.