August 25, 2010
After what happened in North Carolina, this may not be seen as a bad development, but it’s indicative of what happens in top-down “reforms.” Colleges and universities want a waiver from the stringent exchange requirements for offering health insurance, as the coverage mandates make it too expensive to offer their students (via QandO):
Colleges and universities say that some rules in the new health law could keep them from offering low-cost, limited-benefit student insurance policies, and they’re seeking federal authority to continue offering them.
Their request drew immediate fire from critics, however, who say that student health plans should be held to the same standards that other insurance is.
Among other things, the colleges want clarification that they won’t have to offer the policies to non-students.
Without a number of changes, it may be impossible to continue to offer student health plans, says a letter that the American Council on Education sent Aug. 12 to Health and Human Services Secretary Kathleen Sebelius, signed by 12 other trade associations that represent colleges.
Additionally, the colleges say that some provisions of the law don’t apply to their policies, including those that require insurers to spend at least 80 percent of their revenue on medical care and that bar them from setting annual coverage caps.
Universities usually offer some form of health insurance to students, but those policies fit the needs of young adults, who generally don’t access the health care system nearly as much as older adults. They have smaller networks, as students generally stay within a small geographic area. Premiums are lower because of the low risk, but also because some comprehensive services don’t get fully covered, usually those accessed by people in middle age or older. In short, the policies are tailored to the clientele, which is why pricing can be more efficient.
In ObamaCare, policies can no longer be tailored to clientele, nor can consumers make choices that best fit their lives. All policies must look mainly alike, thanks to the top-down command “reforms” in ObamaCare, which mandate coverages regardless of risk or need. Needless to say, a comprehensive policy designed to cover Americans in their 50s would be vastly unnecessary for almost everyone who attends college in their youth, and vastly more expensive than they can afford.
Thus, universities and colleges have a conundrum. They can either offer policies that are so expensive that only a few can afford to buy them, which creates all sorts of problems in managing a risk pool, or they can simply get out of the health-insurance business altogether. They won’t be the last to choose the latter.