Healthcare and Higher Education
Few things have generated more controversy and media attention in the last few months than healthcare reform. Congress has been under enormous pressure to balance the diverse needs of the entire country while being pulled from all directions by special interest groups. In all the chaos, one group has repeatedly fallen through the cracks: higher education.
Back in October, the Senate Finance Committee passed a draft bill addressing healthcare. The language of the bill appeared to outlaw any health plan that was not individual or employer-based, effectively eliminating student plans. American College Health Association (ACHA) president James Turner commented at the time that 'Congress simply isn't thinking about students' healthcare.' Higher education representatives were able to make their voices heard, and the language was corrected in the final Senate bill.
Senate Majority Leader Harry Reid speaking at a Democratic rally on healthcare on December 23, the day before the Senate passed H.R. 3590.
Passed on December 24, Senate bill H.R. 3590 specifies that it does not prohibit institutions of higher education from offering student health insurance plans. However, the bill does contain an error that could have significant consequences for students. In letters addressed to Congress last week, the American Council on Education (ACE) and the ACHA point out that the current wording of the bill doesn't prevent student health policies from being considered to be individual plans.
College health plans are currently exempt from federal regulations that apply to individual health plans. By staying separate from the general market, these plans benefit from the fact that they cover a relatively young and healthy group of people. This keeps premiums low for the nearly three million American students who are covered by college insurance. Without that exemption, costs could skyrocket. The letter warns that H.R. 3590 threatens the ability colleges and universities have to offer students group-like insurance plans that are high in quality but low in cost, as the bill applies individual market reforms to such plans.
Putting an additional financial burden on students seems contrary to the objectives of healthcare reform, particularly at a time when the federal government has been lobbying to make higher education accessible to more people. With tuition high and financial aid becoming more and more scarce, increasing the cost of student health insurance would fly in the face of that goal.
Fortunately, the House's healthcare bill, H.R. 3962, does protect the current exemption for college health plans. Although many people expect that the final legislation will look more like the Senate bill, the ACE and the AHCA hope that their concerns will be taken into consideration as Congress goes into the reconciliation process.
The letter expresses a second concern that applies to both the Senate and House bills: By increasing state Medicaid costs, the federal government is effectively reducing financial support for colleges and universities. Previous research by Budget Director Peter Orszag has shown a direct inverse relationship between Medicaid costs and state funding for higher education. As the cost of supporting Medicaid goes up, the amount of money directed toward colleges and universities goes down.
The letter supports Congress's effort to increase access to healthcare, noting that expanding Medicaid is a crucial part of that process and applauding the subsidies offered by the federal government through 2016. However, the ACE has expressed concern that the measures will not be enough to insulate states and institutions of higher learning from undue financial hardship without Congress taking further steps to defray Medicaid costs.
The new healthcare legislation isn't all bad for students. Both bills raise the age under which students can be covered by their parents' health insurance to 26, which is no small victory. And, as the letter points out, the bills will improve the quality and accessibility of healthcare for everyone by supporting innovative medical research.