Obamacare and students: Beneficial or detrimental?

The Obamacare debate rages on. House Republicans are preparing to vote to extinguish President Obama’s soon-to-be-enacted health care reform plan for a 40th – yes, 40th – time. Only now, it is coupled with threats of a total government shutdown.

The Patient Protection and Affordable Care Act, colloquially known as Obamacare, has been under unprecedented attack from opponents since its inception and continues to contend with disapproval from a majority of Americans.

Young Americans, however, disproportionately favor the plan – college students included. Behind all of the rhetoric from Obamacare proponents and challengers alike, students will find a complex health insurance system awaiting whose impact may not be truly felt for years to come.

The basic tenet of Obamacare is simple: uninsured Americans not eligible for Medicaid must buy health insurance, or will face fines. This particularly hits home for college students. The United States census shows that the uninsured rate for ages 19-25 is 27.2 percent, 6.8 percent higher than the national average.

An immediate impact on students is the Obamacare stipulation that health care plans must offer dependent coverage for anyone under 25. This significant increase in the age ceiling has already been taken advantage of – between 2011 and March 2013, 15 million Americans aged 19-25 took advantage of this policy and remained on their parents’ plans in the past year.

By Jan. 1, 2014, those without insurance will have to pay a $95 fine, and this will increase to $395 in year two, and $695 in year three. The idea behind Obamacare for students is that they can join their parents’ plans as students for very low costs – costs which will not increase the parents’ premiums, either – and avoid these penalties.

This all seems well and good; while many students do not have health insurance and will be required to tack onto a plan, Obamacare provides an affordable option for them.

Critics of Obamacare’s impact on students and young adults seem to ignore this fact – for better or worse – and instead point to its impact on
college health plans. It should be noted that because New College does not provide this, such argument is irrelevant to NCF students.

However, it is a valid concern that could   affect  millions  of   young
Americans. The Wall Street Journal reported that colleges were dropping student health plans for the new academic year due to federal requirements to astronomically increase the cost of these insurance arrangements.

Data shows colleges are being asked to increase the costs at unprecedented levels – in some cases, over 1,000 percent. Essentially, the idea of “student health insurance” is being abandoned here. The Affordable Care Act specifies that anyone under 26 is to either enter the market as traditional independents, or to attach themselves to their parents’ plan. The in-between is vanishing by the minute.

The rapidly increasing costs of college plans are not without explanation. The idea behind the Affordable Care Act as a whole is, simply, a federally supervised marketplace for health insurance, where the more people pay in and participate, the lower the costs will be. This is why penalties are being enforced and why cheaper plans are being eliminated. In other words, the utopian vision of this legislation is that if everyone pitches in, everyone will reap the benefits.

This aspect of Obamacare has led several health care experts, such as Jason Linkins of the Huffington Post or Dhruv Khullar of USA Today, to dub the “young, healthy male” demographic as the least likely to benefit from the new health insurance requirements. They cite the combination of increased college plan’s cost and the high percentage of uninsured young Americans as basic reasons why.

With this information in mind, deeming the effects of Obamacare as harmful or helpful will depend on a case-by-case analysis. Students that were under the health plans of universities including Lenoir-Rhyne University in North Carolina and the State University of New York have seen the costs of their insurance go up, and some have even dropped out.

This is a reality, and so is the requirement of those uninsured to purchase insurance. These facts undeniably make it easy for opponents of the legislation to deem it unfit and harmful for students.

There is that alternate consideration, however. Students whose families perhaps could not pay for their insurance before could now attach themselves to their parents’ plans for a much cheaper price. And with everyone – or those not insured, and not too poor – required to purchase health insurance, the competitive insurance market should, theoretically, gradually drive down equilibrium prices.

Florida students will begin to get an idea of how this affects them on Oct. 1, when Floridians will enter the complex system that is Obamacare. Success will depend on the student’s situation, their parents’ situation, and if the participation of all Floridians will help to finally drive down the unseemly cost of health insurance in the United States.

 

Information for this article was taken from Forbes, NBC News, USA Today, the Huffington Post, the New York Times and the Wall Street Journal.

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