How Obamacare Will Affect College Students

As open enrollment for the Affordable Care Act (ACA) rolls out October 1st, college students must have health insurance when the mandate takes effect on January 1, 2014 or they or their parents will pay a tax for that decision.

Students should have more options for health care coverage as a result of the ACA, otherwise known as Obamacare, but many of them know little about the state Health Insurance Marketplace and need to become more informed about the options.

While expansion of coverage under the health care law has helped 3.1 million young people get insurance through their parents’ plans until they reach age 26, not every 20-something has that option and may remain uninsured.  Part-time students or those who graduate but don’t land a full-time job right away may opt to go without insurance or opt for coverage through student health plans.

Most colleges purchase plans to cover students and those are considered to be individual insurance plans under the ACA, just as if they bought their own insurance.

If a student opts-out of purchasing insurance from their school’s student health plan and decides to purchase a plan in the marketplace, they will be eligible for a tax subsidy depending on their state and exact income level.

For example, if your annual income is $11,500 to $46,000 – or if your family of four earns up to about $94,000 – you’re eligible for a tax credit on premiums for insurance purchased in the marketplace.

Depending on their income and where they live, some young adults may, for the first time, qualify for Medicaid under ACA provisions that expand coverage to individuals with incomes up to 138 percent of the federal poverty level ($15,856 in 2013). States can decide whether to adopt the expansion; about half have done so.

Insurance plans purchased under the new law must cover a wide range of preventive care without co-payment, including a wide range of standard tests and lab work, specialized women’s care (including birth control), and screenings and immunizations for children.

The law also mandates that there are no yearly or lifetime limits on coverage – if you reach your “out-of-pocket maximum” in a year, you pay no more for necessary additional treatment.  All insurance plans in the Healthcare Marketplace must also include coverage for outpatient and emergency services, hospitalization, maternity and newborn care, mental health disorders, prescription drugs, rehabilitation services and devices, lab services, preventive and wellness services, chronic disease management and pediatric services.

There is a possibility that even though students may pay very low premiums for school-sponsored insurance plans, those premiums might increase because of the mandate that health insurance plans offer these “essential health benefits” free of charge.

Students who attend schools that offer self-funded student health plans – (schools that pay the healthcare claims directly rather than buying an insurance policy) will also be eligible for tax credits if they don’t enroll in their college’s plan. There are at least 40 such schools in the country (mostly in California and the Ivy League system) that self-fund their student health plans.

To keep college students up-to-date and well-informed about the ACA, one organization, Young Invincible,  has launched a nationwide education campaign called Healthy Young America, and are reaching out to more than 1,000 youth-serving organizations and health partners with information about the ACA , healthcare apps, national road maps to coverage and new options through the health insurance marketplace.  http://younginvincibles.org/

For more information on the Healthcare Marketplace go to https://www.healthcare.gov/

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