Senator: Insurers Dodging Student Health Plan Reform

May 24, 2011

Six weeks have passed since the comment period closed on the U.S. Department of Health and Human Services’ proposed rules for how student health plans provided by colleges and universities would be affected by the health care overhaul. But Senator John D. Rockefeller IV, Democrat from West Virginia and chair of the Senate Commerce Committee, waited until Friday to weigh in with a letter to HHS Secretary Kathleen Sebelius that reiterated his call for protecting students with pre-existing conditions and guarding against dollar limits on care, and for avoiding unexpected dropped coverage because of clerical errors. But he also went to great lengths to call out insurance companies that say student health plans should not be subject to that law because their market is a volatile one with unique administrative costs.

Rockefeller’s letter, which references various articles and other research, focuses mostly on minimum medical loss ratios, or the percentage of every consumer’s dollar that goes toward actual health care rather than administrative costs. The standard ratio ranges from 80 to 85 percent, but as data the senator cites in his letter show, the ratios for the largest student health plans range from 44 to 94 percent – and the fact that many carriers exceed the 80-percent threshold undercuts their protests, he says.

It’s not surprising to see the pro-Affordable Care Act senator trying to make sure Sebelius isn’t swayed by the insurers’ comments, said Bryan A. Liang, executive director of the Institute of Health Law Studies at the California Western School of Law. This allows Rockefeller to not only make a clear statement after the comment dust settled, but also remind Sebelius that she too has called on insurers to embrace health care reform. The letter is also particularly timely as more states are applying for ACA waivers, Liang said. Steven M. Bloom, director of federal relations for the American Council on Education, said there’s nothing in the letter that ACE would disagree with; in its own comments ACE took a more ambivalent position on the medical loss ratios, recommending that HHS follow guidance from the National Association of Insurance Commissioners.

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