WHAT STUDENTS NEED TO KNOW ABOUT THE AFFORDABLE CARE ACT and STUDENT HEALTH INSURANCE
This guide was produced by the Student Health Insurance Task Force and included in their report. As of October 3, 2014, this information was verified to be accurate. While the GPSA will make every effort to keep it up to date, it does not constitute legal or financial advice. International students are particularly encouraged to seek the advice of the office of international programs before enrolling in any insurance plan other than the Penn State student health insurance plan. If you believe this page contains an error or have specific concerns, please contact the GPSA office.
Health care reform makes important changes to the health care system. Health insurance exists to protect people from the financial consequences of a serious illness or injury. Before the ACA, some Americans were denied health insurance because they had pre-existing health conditions which insurers refused to cover. As of January 1, 2014, nearly everyone (including students) must get medical coverage or pay a fine. Enrolling in the student health plan at Penn State is one way of meeting that requirement. This guide tries to help students understand the issues and their options.
How are college students affected by the ACA?
- Under the new law, most people over age 18 (this includes nearly all college students) must purchase health insurance or pay a penalty.
- The ACA provides affordable ways for some students to get quality health insurance coverage that meets their specific needs.
Are there any exceptions to the ACA’s individual mandate that students have health insurance?
- There are few exceptions to this rule, and they include students:
- Whose household income is so low that their family unit does not have to file federal income tax;
- Who qualify for a hardship or affordability exception when they apply for coverage on their state’s health insurance exchange;
- Who are members of a recognized Indian tribe, health care cost-sharing ministry, or religious group that objects to health insurance; or
- Who are in the U.S. illegally.
- Check with your state’s health insurance exchange if you believe that you may qualify for an exception and do not wish to enroll in a health plan.
What are my options for getting insurance if I am covered by ACA’s individual mandate?
- Most students will have several options, including:
- If you are age 26 or younger, you may be able to continue to be covered as a dependent by a plan from a parent;
- Purchasing coverage through the Penn State student health insurance plan;
- Purchasing ACA coverage as an individual or under a family plan, if you are a dependent, through one of the ACA exchanges/marketplace, where you may be eligible for a premium tax credit, or subsidy, if income requirements are met;
- If your income or your family’s income is low enough, you may qualify for Medicaid
- A catastrophic or “young invincible” plan offered through the Exchange/Marketplace
- Purchasing an Individual Health Plan offered outside of the Exchange/ Marketplace
What is the Exchange/Marketplace?
- The Exchange or Marketplace is a new source of health coverage, which may offer lower costs based on your income. Each state has one, either set up on their own or through the federal government.
What kinds of health insurance options are available through the Exchange/ Marketplace?
- There is a menu of plan designs based on levels of benefits offered through the Marketplace. These plans are called: Bronze, Silver, Gold and Platinum. Bronze plans are designed to pay 60 percent of your health care costs; Silver plans are designed to pay 70 percent; Gold are designed to pay 80 percent; Platinum are designed to pay 90 percent. Plans can achieve those percentages in many different ways
- Individuals with low and moderate incomes may be eligible for an upfront premium tax credit (subsidy) when purchasing insurance through the Marketplaces in order to reduce their monthly premiums. Premium tax credits (subsidies) will be based on the lowest cost “Silver Plan” in the state. That amount can be used to purchase any plan on the exchange, however, the individual will be responsible for any additional premium.
- Once enrolled in a Marketplace plan, you must continue enrollment in the same plan throughout the policy year unless a qualifying life event occurs, such as moving to a new state, certain changes in income, or changes in family size (i.e., marriage, divorce, or birth of a child).
How does the Penn State student health insurance plan compare to the plans available through the Exchanges/Marketplace?
- The Penn State student health insurance plan equates to Platinum level coverage on the Marketplace, the highest level of coverage.
Who is eligible for a premium tax credit, or subsidy, through the Marketplace?
- Eligibility for premium tax credit (subsidy) is based on the Tax Filing and Social Security data provided by the applicant to verify household income. Therefore, if a student is considered a dependent on their parents’ tax return, their eligibility for a subsidy is based on their parents’ income.
- To qualify for a premium tax credit (subsidy) to purchase insurance through the Marketplace in a State that has not expanded Medicaid like Pennsylvania, one must be a member of a household with earnings between 100% and 400% of the Federal Poverty Level, with no access to affordable employer-sponsored coverage.
- To determine your eligibility for a premium tax credit (subsidy) go to healthcare.gov
Will I be able to see my current doctor if I purchase coverage through the Marketplace?
- It depends on whether you select a plan that has your doctor in its network. Some plans in the Marketplace achieve their cost savings by having narrow doctor networks. You should look closely while shopping on the Marketplace to determine if your doctors and hospital are included in the network.
What if I live out-of-state?
- If you do not consider yourself a Pennsylvania resident (think about where you pay taxes, have your driver’s license, etc.), you should look into the health insurance exchange in your home state. You can find information about your state’s exchange on the federal ACA website, where there is a list of state Marketplaces, visit https://www.healthcare.gov/whatis‐the‐marketplace‐in‐my‐state/
- Out-of-state students considering coverage under a parent’s plan or on the ACA exchanges should closely examine the physicians and hospitals that are considered “in-network” and “out-of-network”. Some plans would not provide “in-network” coverage for medical received from University Health Services or doctors and hospitals around the Penn State campus.
- When you consider plans in your home state, you may be able to find a “multi-state” plan that has a national or regional provider network that includes Pennsylvania.
How are international students affected by the ACA?
- International students at Penn State have had to demonstrate adequate insurance coverage for many years. International students can continue to enroll in Penn State’s Student Health Insurance Plan or can demonstrate comparable insurance coverage and be granted a waiver out of that plan. Information on waiver requirements for Penn State can be found at http://studentaffairs.psu.edu/health/services/insurance/international.shtml. Any international student considering a waiver of the student health insurance plan should consult with the Penn State office of international programs before signing up for marketplace plans or other outside plans. This ensures that waiver requirements are met and that students receive the most current information on official interpretation of relevant insurance and tax law.
- The ACA exchanges provide another option for international students to explore for their health insurance needs, but international students should discuss that option with someone familiar with immigration and tax law. The Department of Health and Human Services has interpreted the ACA to mean that international students can purchase insurance on the exchanges and possibly even receive subsidies, if they qualify because of low income (https://www.healthcare.gov/immigration-status-and-the-marketplace/). However, at this point it is not clear whether there may be complications related to verification of their resident status or completing tax documents for international students to be able to take advantage of the exchanges.
- If international students choose to purchase insurance through the exchanges, they should make sure that the plan they choose meets the Penn State waiver requirements and any requirements from their visa. For example, J-visa students must have medical evacuation and repatriation coverage as part of their insurance, and this may not be commonly included in insurance policies through the ACA exchanges.
How are families impacted by ACA? Children cannot be seen at UHS and have no option for full coverage of covered pediatric care.
New mandates under the ACA require 100 percent coverage for pediatric dental and vision care, as well as for a host of preventive services such as vaccinations, well-child checkups, autism screening, and more. So even when families have to go out of UHS for care, they may find many services they use are fully covered.
What is the penalty if I do not enroll in a health insurance plan?
- In 2014, the penalty is $95 per individual adult or 1 percent of your income, whichever is higher.
- Penalties increase annually after 2014. In 2015, the penalty will rise to $325 or 2 percent of your income; in 2016, these numbers increase to $695 or 2.5 percent of your income.
What will an insurance plan cost?
- The cost of a plan for an individual student depends on a number of factors. For example:
- Costs for the Penn State Student Health Insurance plan can be found here: https://www.aetnastudenthealth.com/
- If you are under age 26 and eligible for coverage under a parent’s plan or are a dependent of another individual, your coverage will depend on their plan. Costs of dependent coverage can vary a great deal, as some plans make this more expensive than others.
- If you are financially independent and your income is very low, you may qualify for Medicaid, which does not require you to pay premiums and has minimal out-of-pocket costs. Medicaid plans may limit your choice of providers.
- If you are financially independent and have income that is too high for Medicaid coverage, you may qualify for subsidies and credits for the cost of your insurance through an ACA exchange. Healthcare.gov allows you to enter information on your residence, income and other characteristics and find out the plans that are available for you, as well as their costs, including any estimated subsidy. Make sure you search for plans under the state where your residence is established. You can see what’s available here: https://www.healthcare.gov/how-much-will-marketplace-insurance-cost/
- If you are under age 30, you can enroll in a “Young Invincible Plan.” This plan has a very low premium but high deductibles and other cost-sharing if and when you do use health services.
What are Young Invincible Plans?
- Young Invincible Plans are catastrophic plans available to people under age 30. They are designed for healthy young people who do not anticipate needing many health services, but who want protection against having to bear the full cost of a major medical emergency.
- These plans typically have very low premiums, often in the $40-$60 per month range, but their annual deductibles can be several thousands of dollars.
- On the exchanges, these plans must cover three primary care visits per year at no cost to the enrollee.
- With the exception of the three annual primary care visits, you will be responsible for the full cost of all health services up to the deductible amount.
- There are no subsidies or tax credits available for Young Invincible Plans. If your income is low, you may want to compare the subsidized costs of Bronze and Silver plans, which have lower deductibles, against the unsubsidized premiums of a Young Invincible Plan.
My health plan requires me to pay for deductibles, coinsurance, and other costs. How can I make sure I spend my money effectively?
For many years it has been close to impossible to comparison shop in health care to make sure you get a fair price. New resources for health care consumers, however, are giving everyone new tools. If you have time to decide about a health care service, you can consult some of these resources:
- Our Aetna student health plan at Penn State provides the Aetna Navigator, which you can use to estimate costs and save money
- The Health Care Blue Book and Fair Health have tools that allow you to search for an estimate of fair prices for many different services in your location. (https://www.healthcarebluebook.com/) and (http://fairhealthconsumer.org/)
- Choosing Wisely provides a list of services and procedures that physicians have developed that offer little or no value to patients (http://www.choosingwisely.org/)
Where can I get more information?
- For more info on the exchanges and subsidies, go to healthcare.gov.
- For more info on the Penn State student health insurance plan go to http://studentaffairs.psu.edu/health/services/insurance/
- The “Young Invincibles” web site provides some good information for students and they also provided a guide for students: http://health.younginvincibles.org/wp-content/uploads/2013/09/ACA-Toolkit_Helping-Students-Understand-Health-Care-Reform-and-Enroll-in-Health-Insurance.pdf
- NAFSA, an association of international educators, provides resources for international students and scholars: https://www.nafsa.org/findresources/Default.aspx?id=35008
- The American College Health Association provides resources on how ACA is impacting student health insurance: http://www.acha.org/Topics/affordablecareact.cfm
- The U.S. Government also issued a toolkit for colleges and universities that has helpful information for students: http://www.acenet.edu/news-room/Documents/ACA-Toolkit-100213.pdf
In addition to these resources, information in this guide was drawn from helpful resources developed by the Texas A&M University, University of Miami, University of California, University of Maryland, and the University of Wisconsin.