Although the topic of insurance plans for college students were mostly left out of the health care debate, Sen. John D. Rockefeller, D-W.Va., is pushing for student plans to have the same consumer protections as others do under the health law.
Rockefeller urged Health and Human Services Secretary Kathleen Sebelius in a letter on Friday to hold student health insurance plans to the same medical loss ratio requirements set by the health care law. These requirements force insurers to give customers more coverage for their money.
In February, HHS proposed a rule to extend many of the consumer protections provided in the health care law to student plans -- for instance, stopping student health insurance plans from putting a lifetime limit on coverage, arbitrarily rescinding policies, or denying coverage for students up to age 19 with preexisting conditions.
However the rule does not say how much an insurer has to spend on actual medical care.
“While some insurers are delivering health care to students at levels that meet or exceed the law’s minimum medical loss ratio target of 80 percent for student plans, many insurance companies do not,” Rockefeller wrote. “Some school-sponsored plans were found to have paid out fewer than 30 cents per premium dollar collected, resulting in excessive insurer profits and low value to the consumer.”
According to Rockefeller, some school insurers have ratios as low as 10.2 percent.
Insurers argue that the student insurance market should not fall under the medical loss ratio requirement because it is a shifting market with special needs. But Rockefeller cited rates from Massachusetts that are on par with the state’s health care system; there, he said, student plans were more profitable and had lower administrative costs than individual insurance plans.
A two-year New York investigation into student health insurance plans by then-state Attorney General Andrew Cuomo found insurers routinely shortchanged student plans. The probe revealed that many school plans were unnecessarily costly, with many claims paid out by insurance companies accounting for only a small fraction of the premiums students paid.
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