Affordable Care Act expands student access to insurance and benefits, yet will not lower costs for all… College buyers in Massachusetts marketplace may face higher premiums and less coverage than they would with Wellesley student insurance

Contributing Writer

With the nationwide launch of the Affordable Care Act (ACA) on Oct. 1, Wellesley students are considering enrolling in the new health insurance exchange market. In a survey of 157 students conducted last week by the Wellesley News, 36 percent of students said that they are considering enrolling in the federal exchange market, and six percent say they plan to enroll.

According to Dr. Vanessa Britto, the director of Wellesley College Health Services, about 40 percent of the student body enrolls in the Wellesley College Student Health Insurance Plan. The remaining students decide to opt out of the College’s insurance plan, often choosing to remain under their parents’ insurance.
Wellesley’s insurance plan and waiver process is managed by University Health Plans (UHP). Kristen Devine, a UHP Account Executive, assures that the Oct. 1 rollout of the insurance marketplaces will not affect Wellesley’s insurance plan.

Open enrollment period for insurance marketplaces will continue until the end of March 2014, and all coverage plans will begin in January. However, the deadline to waive the Wellesley student insurance program for this year has already passed, meaning students who wish to purchase insurance during open enrollment must wait until the fall of 2014 to apply for a waiver.

In order for a waiver to be approved, University Health Plans must deem the students’ new insurance plan comparable to the Wellesley student plan.

“Students need to think beyond what’s cheaper for the wallet and consider more long term impacts,” Britto said. “The whole point is to minimize financial risk in the future. If your policy can’t provide that protection, there will be a major problem in getting the health care you need without causing some kind of financial catastrophe for your family.”

Under the ACA, there are four categories of marketplace insurance plans: bronze, silver, gold and platinum. A bronze plan offers the lowest monthly premium, but the buyer would be required to pay a higher share of medical costs.

Judging by a simple cost-benefit comparison, Wellesley students who choose the most basic bronze plan in Massachusetts may face higher costs and fewer benefits than they would if they were to enroll in the Wellesley student insurance plan. This is assuming that a student does not qualify for federal or state subsidies, which could lower the cost of purchasing insurance through health exchanges.

The premium for the Wellesley student insurance plan is $1,675 per year. By contrast, the bronze plan with the lowest premium available for a non-smoker born on Nov. 1, 1992, is $167.67 per month, an annual premium of $2,012.04.

The bronze plan requires higher out-of-pocket costs—with a $2,000 deductible—compared to the college plan, which has no deductible.

The Wellesley plan also offers a flexible provider network. Insurance offered by the College follows students wherever they travel, so they can receive coverage both at Wellesley and in their home states, with 20 percent coinsurance for coverage out-of-network. The basic bronze level only offers localized coverage within a limited network of providers and will not cover out-of-network care.
Devine at UHP recommends that students enroll in the Massachusetts exchange, rather than in the one offered within their home state, if they are interested in purchasing a new insurance plan. This way, Wellesley would be part of their local network, and students would not incur extra costs for visits to Wellesley doctors and hospitals.

Dr. Britto at Health Services suggested that students follow the “four-hour drive” test. If a student lives farther than a four-hour drive away, her policy should allow access to nearby medical treatment.
Additionally, all types of co-pays for drug prescriptions, office visits and emergency-room visits are lower with the Wellesley insurance plan. For students who have chronic medical illnesses, a policy that provides high coverage and requires minimum out-of-pocket costs may be preferable.

Some students who require extensive care may find it more cost-effective to double-insure. Kate Puzzanghera ’16 has a chronic medical condition that requires regular medication and treatment. Through the combined coverage of the Wellesley insurance plan and an additional plan provided by her father’s employer, she is able to access the care she needs without imposing great financial strain on her family. However, only a small portion of Wellesley students choose to carry both Wellesley student insurance and coverage from their parents’ insurance.

Overall, Devine and Britto both agree that the benefits offered by the Wellesley Student Health Insurance Plan far exceed the benefits provided by the cheapest, most basic bronze level plan from the Massachusetts exchange.

“We’ve been expecting federal reforms for a while now,” Britto said. “So it’s been our priority to develop a college insurance plan that not only surpasses the standards set by the ACA but also helps students minimize costs and academic interruptions due to sickness or injuries.”

In other states, the insurance premiums in the bronze level may be cheaper than in Massachusetts. Plus, expanded subsidies under the ACA may help some students and their families access affordable insurance by covering some of the cost for premiums, copayments and deductibles. For instance, an individual with an income below $45,960 may be eligible for a subsidy, which increases as income declines. A family with an income below $94,200 could be eligible as well.

With the implementation of the ACA, more families will qualify for Medicaid, and individuals with pre-existing conditions will have better access to insurance. Starting in 2014, the ACA will make it illegal for insurance companies to deny health coverage or charge higher premiums based on pre-existing health conditions.
Puzzanghera looks forward to the benefits she will gain from the national reforms in the long run.
“The ACA ensures that when I leave Wellesley and get off my parents’ plan, I will be able to get coverage, since currently an insurance company could refuse to treat me because of my pre-existing condition,” she said.

“That is going to make my life and many others’ easier and hopefully will decrease the amount of fighting we have to do with the insurance companies.”

Wellesley economics professor Robin McKnight is a health economist who specializes in exploring economic implications of health care policy. She too anticipates long-term gains, particularly in lowering national rates of uninsured young adults under the age of 34. Nicknamed “young invincibles,” this age group is historically known for being the least likely to obtain health insurance.

“The ACA will be beneficial especially in the first years after graduation,” McKnight said.
The provision implemented in September 2010, which allows young adults under the age of 26 to stay on their parent’s insurance plan, has already been successful at reducing uninsurance rates.
In the Wellesley News health care survey conducted last week, when asked about the likelihood of students having insurance if Wellesley did not require coverage, only five percent responded ‘very unlikely’ and 12 percent responded ‘unlikely.’ The majority of respondents believed they would still have insurance regardless of the individual mandate policy at Wellesley.

A national Kaiser Family Foundation (KFF) Poll earlier this year arrived at similar conclusions when it found that about three-quarters of those aged 18 to 25 believed it was important for them to personally get insurance and that insurance is worth the cost. Yet in the same KFF Poll, nearly 80 percent of those under 30 reported having heard little to nothing about the marketplace system.

The majority of students at Wellesley also reported a limited understanding of the marketplace and only a slightly higher understanding of the contents of their current health care coverage.

Some students argue that it may be cheaper for them to pay the penalty of not having insurance rather than to buy a plan. The ACA’s “individual mandate” will be enforced starting January 2014. This means each uninsured adult who can afford insurance must pay a penalty of $95 or one percent of family income, whichever is greater. This penalty will continue to increase every year until 2016.

Tom Burke, a Wellesley political science professor, says students should not to make a decision on health insurance solely based on short-term costs.

“If the price difference between the penalty and the insurance premium is not drastic, students should buy insurance. The cost is worth it if it can protect your health and wallet,” he said. “The Affordable Care Act’s future depends on whether enough young, healthy people sign up to balance the higher costs from the older population and sick people.”

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