The need-to-know on health care coverage

As the March 31 deadline to sign up for an insurance policy through the Affordable Care Act approaches, college students must make some important decisions about their plan of action, or face a tax penalty.

Prior to the opening of the health insurance marketplace on October 1, 2013, college students had limited insurance coverage options.  For instance, they could stay on their parent’s plan only as long as they were enrolled as full-time students.  However, if they were injured in a car wreck or became too ill to continue in school, they were dropped from coverage. Another way to go was just to go without coverage completely.

“Colleges offered some limited coverage plans, but many students simply went without health insurance coverage and hoped for the best,” said Patricia Grey, professor at the UH Law Center and director of research at the Health Law and Policy Institute. “Those that had coverage faced the prospect of coverage excluding a chronic condition as well as caps on the coverage that was offered.”

Today, options on are waiting to be shopped for by the nation’s 17.5 million students enrolled in public and private four- and two-year universities. If a student is covered by his or her university, they are considered covered under Obamacare.

Even then, students have the option to shop around the marketplace for a policy that suits them. According to the website, individuals younger than 30 can apply for a catastrophic health plan, which is coverage that would be used in the event of an accident or an illness that requires hospitalization.

“These plans usually have lower monthly premiums but high deductibles,” according to the website. “This means you pay for most of your care yourself, up to a certain amount. After that, the insurance company pays its share for covered services … Catastrophic plans also cover 3 primary care visits per year before you meet your deductible, as well as certain preventive care benefits.”

Other options include staying covered under one’s parents’ plan until the age of 26 or applying for Medicaid, the combined state and federal program that affords coverage to people with a limited income. Grey said students need to think about their individual needs when considering the type of policy they want to purchase.

“If they have no chronic conditions (asthma would be an example) and are relatively healthy, they may save money by having a plan with a higher deductible and higher co-payment requirements,” Grey said. “Individuals under the age of 30 might want to review a plan that only offers catastrophic coverage. All plans have to cover certain essential health benefits, but in looking at whether a plan is right for a particular individual, the individual needs to consider what the premium is, whether he or she is eligible for any tax subsidy which might lower the premium cost, what the deductible is on the plan and what co-payment is required for services offered under the plan.”

Opting out is something students may consider as well, but it will come at a price.

Student health insurance coordinator at the UH Health Center Robin Taylor said that if someone doesn’t have health coverage in 2014, they may have to pay a fee. In addition, if they are uninsured, they will also be responsible for shelling out all the cash for their health care.

The penalty in 2014 will be calculated in one of two ways, and you will have to pay whichever of these amounts is higher:

One percent of your yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average yearly premium for a bronze plan.

$95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

“It is also important to know that this penalty will increase every year going forward,” Taylor said. “So, if you opt out of buying a health insurance policy, it is important to remember that the uninsured person will still be responsible for 100 percent of the cost of their medical care. To avoid the penalty, you need insurance that qualifies as minimum essential coverage. To understand this fully and to know what qualifies as minimum essential coverage, everyone is encouraged to visit the website or seek help from a navigator licensed by the state.”

International students have options as well. Non-immigrant international students who are carrying credit hours at UH will be automatically enrolled and charged for the UH-endorsed student health insurance each semester to satisfy the University policy on maintaining acceptable health insurance coverage.

Also, international students may request a waiver of the health insurance fee online after they have registered for classes with proof of an acceptable substitute insurance plan.

Students who need help signing up for health insurance through the federal health insurance marketplace exchange may get it from a licensed insurance broker or from a navigator licensed by the state of Texas. According to Grey, the navigators are based in places like the Neighborhood Centers in Houston.

“Students who have no income, are not maintained as dependents on their parents’ tax return and are not required to file an individual income tax return because their income is below the threshold requirement for filing a return, may request a hardship exemption from having to purchase health insurance,” Grey said. “Students who are here on a student visa are eligible to purchase through the health insurance marketplace exchange.”

With the deadline to purchase just days away, college students need to seriously think about their options and their plan of action. Not only do they have a penalty to look forward to if they refuse to get covered, but the cost of paying for medical expenses for an unexpected illness or accident will be high.

“A single day of hospitalization can cost thousands of dollars,” Taylor said. “A good insurance policy provides access to excellent medical facilities and provides protection against the enormous costs of health care.”

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