In the last few years, few issues have been as tensely debated as the Affordable Healthcare Act or “Obamacare.” While the full effects of this legislation have not yet been seen, there are some areas where impacts are already being seen. If you’re a college student, Obamacare is going to have an impact on you one way or another. Here are a few ways that it will affect you in the near future.
1. You Can Stay On Your Parent’s Insurance Longer
In the past, students could not stay on their parents’ insurance for very long after they became adults. With Obamacare, you can stay on your parents’ plan until you turn 26. This gives you some more time after you get out of college to find a job and start paying for your own insurance before you are cut off. It gives students a little bit more flexibility, even if it costs more money for parents.
2. Student Health Plan Premiums Will Increase
Before Obamacare came onto the scene, students could buy limited benefit plans through their colleges for a nominal fee each year. Insuring the health of college students should be a pretty easy thing to do because they are at the peak of their health in life. These old plans had caps around $10,000 a year to cover medical costs.
Under Obamacare, the cap has been raised to $500,000 per year and the cap is completely removed after 2014. What will happen to the cost of these policies when the insurance companies have to pay an unlimited amount of money each year in medical benefits? Premiums for these plans are going up over 1000% due to Obamacare.
3. Loss of Coverage
Due to these rapidly rising premiums, many colleges are simply getting rid of their health plans that are available to students. Some colleges have already nixed these plans and many more will be following suit in the future. This means that if you’re not on your parent’s plan, you might not be able to get coverage while you’re in school.
4. Bigger Deficits and Fewer Jobs
When you finally do get out of college, you might find it more difficult to get a job. According to the Congressional Budget Office, Obamacare is scheduled to add about $1.5 trillion on its own to the deficit that is already skyrocketing. The deficit has a negative effect on the economy and consumer confidence in the long run. If the government doesn’t figure out how to cut the deficit in the next few years, there won’t be a job market for you to get involved in.
5. Higher College Costs
One largely unknown aspect of Obamacare deals with the government takeover of the student loan industry. In the past, the government-subsidized lenders offering private student loans so that they could offer competitive interest rates on student loans. Obamacare actually ends these subsidies and puts the federal government solely in charge of issuing and servicing loans. Since anyone can get these loans, colleges are raising costs. This creates a dangerous cycle that adds more debt to the financial portfolios of college grads.
Although the impacts of this law will be debated for many years, the impacts of its impending changes are making a difference to students in the here and now.