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Students suffer ObamaCare sticker shock as premiums soar, plans get cut

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President Obama greets supporters at Bowie State University in Bowie, Maryland, October 7, 2010.Reuters

While millions of Americans are watching their individual polices get canceled due to ObamaCare regulations, the new health care rules are also having a major impact on college campuses. 

For decades, universities and colleges have offered students bare-bones policies. But because of the Affordable Care Act, those policies no longer cut it – and universities are forced to decide whether to offer significantly higher-cost plans or cancel coverage altogether.

The new rules affect a broad swath of American schools, especially the small ones.

At Bowie State University in Maryland, the cost of student health insurance policies went from roughly $100 a year to $1,800 a year.

The cancelled plan offered $5,000 worth of medical coverage to students for just $54 per semester. University administrators said an acceptable replacement under the Affordable Care Act would have cost $900 per semester, a 1,500 percent increase.

Students who need individual coverage are likely to find a better deal for themselves on the Maryland Health Connection insurance exchange, University spokeswoman Cassandra Robinson said.

In the end, the school decided to drop the policy for all of its 5,500 enrollees. Students were notified of the dropped coverage on the school’s website.

"Bowie State University has suspended offering health insurance for domestic students for the 2013-2014 academic year," according to the school's official website. "Due to new requirements of the Affordable Care Act which will go into effect on January 1, 2014, the cost of insurance for domestic students will increase to approximately $1800 per year."

The sticker shock didn’t sit well with some students who spoke out against the price hike.

“You’ve haven’t done anything Obama and I am disappointed in you,” one student said. Another told Campus Reform, “We don’t have that money. We can barely afford books.” 

The frustration has been felt across the country as colleges and universities have to decide whether to cut coverage or offer sky-high plans that in some cases triple the cost of premiums.

In New Jersey, students who enrolled in this past semester were the first class that had to shoulder the higher premium costs. Many community colleges in Bergen and Passaic counties were forced to cut student coverage altogether.

In Cranford, N.J., Stephen Nacco, the Union County Community College Vice President of Administrative Services, says the cost of health insurance is now “more than a thousand dollars per students and that it is dramatically different” than what it had been in the past.

Students were paying so little before because the coverage they received was so scant. The costs have gone up because under ObamaCare, plans must offer coverage for services like annual checkups and alcohol abuse treatments. Because they offer a wider range of services, the premiums also increase.

According to the New Jersey Association of State Colleges and Universities, students at nine schools in the state saw the cost of their policies triple, Paul Shelly, a spokesman for the organization told North Jersey.com.

It’s been a similar story across most of the country.  

According to a 2008 study by the Government Accountability Office, about 6,000 students or about 7 percent of the total number of 18-to-23-year-olds in college, bought their own insurance, usually through plans arranged with the school.

The same study found that 60 percent of schools’ plans had coverage of $50,000 or less for specific conditions, and almost all the rest had some sort of payout caps that they will have to do away with by 2014.

In the past, students at Bethany College in Lindsborg, Kan., were offered a one-year plan that cost students $445, with payouts capping at $10,000. For the 2012-2013 academic year, the payout cap was increased to $100,000 per the new health care overhaul, which meant students at Bethany would have to shell out more than $2,000 for coverage. It apparently was too much in the end. 

Bob Schmoll, Bethany’s vice president for finance, told The Wall Street Journal, the school “decided not to offer coverage for our students next year” given the proposed increase in premium. Schmoll says the school could have kept the limited-coverage plan but that it would have financially not been feasible.

Administrators at Lenoir-Rhyne University in North Carolina, Cornell College in Iowa and the University of Puget Sound in Washington also told students they would be dropping school-sponsored coverage. The three schools say student premiums would have gone up 10-fold.