01 August 2013

The Affordible Care Act: Where do College Students Fit In?

Lately, President Obama has spent a lot of time touring the country to discuss the economy and the middle class as well as touting the benefits of his landmark legislation, the Affordable Care Act (ACA).

Poor and middle class Americans will likely benefit the most from the ACA with its system of subsidies and tax credits for purchasing health insurance, which is something that the president is keen to highlight.

Less positive attention however, is paid to those individuals who are in the process of gaining the skills necessary to enter the work force and embark on a career, namely college students.

With all the stories in the news about sticker shock for young people buying health insurance, many college students are skeptical, wondering how the ACA will help them, if at all.

The good news is that there are many provisions in the ACA that are aimed at helping young people, so that they too can transition into the lives they hope to lead, without worrying about healthcare.

Admittedly this is a tall order, and though it is still unclear as to how exactly the implementation of the ACA will play over the next few months, let’s looks at some of the ways so far that college students can benefit.

 Medicaid: Big Changes, For The States That Want It

One of the ACA’s more controversial and celebrated provisions is one that calls for the voluntary expansion of Medicaid on a state-by-state basis.

The expansion would allow adults who do not have children to apply for and be covered by Medicaid, a first in the history of the service.

Medicaid, for those of you who don’t know, is a taxpayer and government funded healthcare plan for people whose income is too low to be able to afford private health insurance.

Currently, the annual income requirement in most states is 100% above the federal poverty line, per family. The expansion will raise that requirement to a considerably higher 138% above FPL, which would mean that more people stand to benefit from Medicaid.

Although the expansion is not mandatory, New York and New Jersey are among the states that have already begun expanding their policies, and 26 states in all are either on board with the changes or leaning toward expansion.

You may be able to receive benefits under Medicaid, once the ACA comes into full effect in January 2014.
Photo: Stockvault

Student Health Plans

Most accredited four year colleges and universities in the U.S. offer health insurance to their students at a reduced rate, during a given period of enrollment. You may be familiar with these plans, or you may already be enrolled in such a plan.

The ACA requires that all healthcare plans provide coverage regardless of pre-existing conditions, and a list of health services are to be covered as well. These services, which include prescriptions, emergency medical, and mental health services, are currently not covered by most student health plans.

The end result: SHP’s aren’t going anywhere. And it looks like they will be better under the ACA.

Catastrophic Insurance: The Risky Choice

Many students don’t benefit from student health plans, and may be wondering how they can find healthcare that protects them from a big medical expenses at a low cost. Catastrophic insurance does just that.

Catastrophic Insurance Plans are cheap, and they are set up to shield you from paying thousands due to major unforeseen medical emergencies.

The problem with these plans is that it’s a one-way street: you pay less to prevent a disaster, but common health services like regular checkups are not often covered. For this reason, this option is not recommended unless you know what you’re getting into, and you’re sure it’s the best choice.

Mom and Dad May Be Able To Help

If you’re a working student trying to make it on your own, you may be too prideful to ask your parents to help with your insurance. But in actuality, it might be your best option.

In 2010, the ACA implemented a provision that allows adults to remain insured through their parents’ insurance policy until age 26. This was of course great news for millions of Americans. If your parents are working and have insurance, and you’re not yet 26, it’s worth exploring this route to healthcare.

If All Else Fails: Subsidies

The Affordable Care Act requires states to have an online marketplace in operation by October of this year that will allow individuals without insurance to purchase it so as to comply with the individual mandate.

Aside from not having to pay a fee, the bright side of the mandate is that tax subsidies are available for people under the age of 65. The government calculates how much you can save based on your annual income, number of dependents, and marital status.

The Henry J. Kaiser foundation has set up a subsidy calculator that will give you a quick estimate of how much you can save, so you can know going in, what breaks you’re entitled to.

Conclusion: It’s Not So Bad After All

Despite the warranted concern of many young Americans, it appears that healthcare reform is indeed on their side.

This knowledge is not yet enough to lessen concerns about the future that many Americans have, but it is enough to help them move forward without hesitation, into an option that will give them some security, in a time of extreme and relentless uncertainty.

Michael Cahill is the Editor of the Vista Health Solutions Blog. He writes about the health care system, health insurance industry and the Affordable Care Act. Follow him on Twitter at @VistaHealth


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