With summer vacation upon them, students probably aren’t thinking much about their health insurance at the moment, but when they go back to school in August they may be in for a nasty surprise. Many schools are discontinuing affordable student insurance programs, citing new Obamacare regulations that would render these programs prohibitively expensive.The Wall Street Journal provides an example:
Bethany College in Lindsborg, Kan., this past year offered a 12-month plan that cost students $445, while capping payouts at $10,000. For the 2012-13 academic year, the Obama administration said the payout cap must be at least $100,000. Bethany said students would have had to pay more than $2,000 to get that new level of coverage.“We decided not to offer coverage for our students next year given the proposed increase in premium,” said Bob Schmoll, Bethany’s vice president for finance.
This is only one school, but colleges around the country are beginning to make similar decisions. The Jounal estimates that 60 percent of American colleges have plans that will be affected by the new requirements; many, if not all, will choose to cancel their insurance programs entirely. The Obama administration defends this as a protection against poor quality healthcare plans, but it’s hard to see how this benefits the students who will no longer have an affordable health insurance option.We seem to remember that advocates of Obamacare told us that Americans who were happy with their current health insurance wouldn’t face any changes under the new law. Apparently, that wasn’t true.One of the problems with the American health care system is the ability of lobbies to persuade Congress and state legislators to mandate coverage for their own pet causes or diseases. Chiropractors, acupuncturists, psychologists, drug companies: everyone wants to be included in mandatory coverage.Unfortunately, every year special interests will find ways to hook new mandates onto the insurance requirements, and every year the cost of coverage will inexorably rise.At one level there is nothing wrong with this; the more coverage for consumers, the better. But there’s the question of cost. If all insurance plans have to be gold-plated, full-service — and pre-existing conditions have to be covered — then health insurance is going to be unaffordable for many and perhaps most people. Young people in particular need low cost options; their incomes are low and their health risks are less so for some students choosing a cheap plan with limited coverage makes sense.Students probably won’t be the only ones to face nasty surprises from the new system as time goes on. Although Obamacare was passed more than three years ago now, most of its provisions still have not taken effect. The public is slowly becoming aware of “minor” provisions hidden deep within the 2,700 page bill that are turning out to have a major impact on their lives. In many cases, people haven’t liked what they’ve seen; contrary to the predictions of supporters, public support for the bill has actually dropped in the years since its passage.