Thursday, April 3, 2008

health insurance requirement for Texas college students

The Texas state legislature is considering a measure that would require all students at state-supported colleges and universities to have health insurance. About one in four of the state’s college students are uninsured. Some students who are already struggling with the cost of tuition and board are worried that the new requirement would put the cost of college out of reach.

If enacted, Texas would be the only state to single out college students for this requirement. The Commonwealth of Massachusetts has a new law that requires all residents to have health insurance. Similar proposals were defeated in California and other states. The most recent polls show that a slim majority of Americans are opposed to mandated health insurance coverage.

The state gives colleges the option of providing campus-based health coverage but does not require this service. Such plans are great for providing routine health care at a reasonable cost, but are inadequate for providing catastrophic care or medical care with other medical providers outside of the school location. surveyed the major medical insurance carriers available in Texas and priced the coverage for an 18-22 year old living in several metropolitan areas of the state. While many full coverage health insurance plans would cost more than $3000 per year, at least one reputable insurance carrier offers catastrophic major medical insurance for less than $50 per month. The most affordable plans were offered by Celtic Insurance at Celtic offers short term medical insurance than can be purchased in one semester (6 months) or one year policies and paid on a month-to-month basis. Longer term renewable policies are also available, but college students typically change insurance coverage too frequently for the renewable policy features to have much value. The cost of a policy with a high $5,000 deductible would be about $500 per year. Cost varies slightly with age, sex and location. Houston, Dallas and Austin areas have the state’s highest medical costs. Details, pricing, coverage options and enrollment are available directly online.

High deductible health insurance policies are becoming increasingly common in pace with the growth in popularity of Health Savings Accounts. A typical student health insurance policy has a deductible of $1000 or more, compared with a $500 deductible only five years ago.

Ideally, a college student would combine a university based health plan at a cost of about $350 per semester for routine care with a high deductible insurance plan at about $300 per semester for peace of mind that the best care would be available with any medical provider in the event of a serious accident or illness. The combined cost of providing full health coverage for a student would be slightly more than $100 per month. While this is substantial for a college student on a tight budget, it is significantly lower than the cost of health care for older adults. The national average cost of full coverage health insurance for adults is now more than $400 per month.

We conclude that as long as insurance coverage is available under $50 per month then the cost of minimal health insurance coverage would not likely be a financial impediment for the majority of Texas college students. We are concerned that the majority of health insurers are priced considerably higher and that market average prices may prevail in the longer term.

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