Animal+House+College

Increasing Health Insurance Coverage Part of the College Completion Agenda

In a recent study on college completion, 69 percent of students who did not graduate said that having health insurance would have helped them “a lot” in getting a college degree. Without health insurance, students risk medical or financial hardship that could prevent them from earning a college degree. Therefore, increasing health insurance coverage must be a part of the college completion agenda.

Estimate Effects of Tax Credits on Monthly Insurance Premiums
Starting in 2014, under the Affordable Care Act (ACA)—known commonly as “Obamacare”—individuals will have new health insurance options, including: the ability to join a parent’s plan until age 26; expanded Medicaid eligibility in some states; tax credits to help pay for health insurance; improved student health insurance plans; and catastrophic plans that cost less upfront and cover primarily big health care expenses. Community college students, in particular, will greatly benefit from the new no and low-cost health insurance options available under ACA Community colleges.

A single and childless 28-year-old who earns less than $2,425 a month would receive a tax credit of $90 per month to help pay for health insurance. After the tax credit is applied, he or she would pay $193 per month towards his or her health insurance. While the individual contributes to the cost of health insurance based on their income, their premium is significantly lower thanks to the tax credit. The individual would also have the option to purchase a lower-cost-level plan with the same level of tax credit, bringing the net premium cost down to $148 per month. Finally, the individual could choose to purchase a catastrophic plan, though it would provide less coverage and tax credits would not apply.

Another student of the same age earning just over $1,300 per month would receive a much larger credit and would pay just $44 per month towards insurance. If she chose to purchase a lower-cost-level plan, she would pay $0 in monthly premiums. At that price, she should choose the Bronze plan over a catastrophic plan, which would cost more and provide fewer benefits. Notably, the tax credits only apply to plans purchased on the marketplace – not to premiums paid for employer-sponsored health insurance. This may confuse students, so you should help explain that students can only use the tax credit when buying a plan through the marketplace.

Student Health Insurance Plan
The Student Health Insurance Plan is a comprehensive major medical insurance plan, providing medical, counseling, prescription, vision and dental services. Under health care reform, SHIPs will have to meet new minimum standards for coverage. If your community college offers a SHIP and it appears to be the best health coverage option for students, encourage them to enroll in it. If your college does not offer a SHIP, ask your leadership to consider whether doing so might benefit your students. Even if your community college offers a SHIP, in most cases students will still be eligible to buy an individual plan and apply for tax credits on the marketplace.

Students may want to compare what health coverage they can purchase on the marketplace with what is included under their school’s SHIP in order to decide which plan is best for them. As noted earlier, the only way to get the tax credit is to purchase coverage on the marketplace; premiums for SHIPs do not qualify for the tax credit.

Our online marketplace,  Digital Benefits Marketplace will offer consumers information about their health insurance options and allow them to apply for coverage through an
online portal, telephone call center, or traditional paper application.