As the new health care reform laws take shape, however, it looks like school plans may find themselves squeezed to pay out more money in benefits or lower premiums, which could mean cheaper health care for students as early as next year. The only problem, of course, is that health insurance providers still have a say in how the new system shapes up — and they aren’t letting go of that other 70 cents without a fight.

This week, the blog Higher Ed Watch released a rather damning article suggesting that college-sponsored plans would soon have to begin paying out more in benefits, and even went so far as to question whether school-sponsored student/health insurance benefit plans (SHIBPS) might cease to exist in the new dawn of health care reform. While the article doesn’t elaborate on all its claims, it states that “SHIBPS [currently] distribute as little as 30 cents in benefits for each dollar in premiums collected,” and that “in the future, it is likely that SHIBPS will have to distribute a minimum of 80 cents (possibly much more) on the dollar in benefits to students, and send reimbursement checks to enrollees if they fail to do so.”

While I’ve covered college health care plans in the past , the 30 percent figure struck me as something I hadn’t come across before. Turns out it comes from a 2008 investigative article in BusinessWeek , at least as far as the Higher Ed Watch piece indicates. Sure enough, when BusinessWeek managed to obtain benefit ratio statements from several colleges in Florida, benefits payed out to students for the given semesters lurked at appallingly low percentages of the cash raked in : 35 percent, 61 percent, 10.2 percent.

More recently, the New York attorney general’s office conducted an investigation into college-sponsored health plans, and concluded that insurers were short-changing students in terms of payouts and coverage . The office’s report, issued in April, found similarly low ratios for benefits payed at several New York colleges: 49.3 cents on the dollar, 28.4 cents on the dollar. Attorney general Andrew M. Cuomo sent letters to the 65 colleges investigated (most in New York, but several across the nation) and outlined the possibility of legal action against the schools if payout ratios didn’t improve. Seems like Higher Ed Watch’s 30 percent payout figure, while a bit of a loose generalization, holds water in a discussion of school-sponsored health care plans.

Meanwhile, the 80 percent figure comes from a provision in the new health care reform bill that controls a number known as the Medical Loss Ratio (MLR). Basically, the MLR is how insurance providers keep track of the percentage of paid premiums they’re paying out in ways that directly benefit policyholders — medical expenses and the like. If an insurer maintains an MLR of 75 percent, it means they’re spending 75 cents of every premium dollar paying policyholders’ medical claims, while 25 cents go toward applications that don’t directly benefit its customers, like administrative expenses, employee salaries, advertising, and, of course, profit. According to BusinessWeek, any MLR under 75 percent is often considered sub-par and grounds for renegotiation within the industry, which casts the college numbers in an especially harsh light.

Beginning in January 2011, however, the new health care reform law mandates that insurers maintain a MLR of 80-85 percent , which may provide a wake-up call for the SHIBPS and their