@deancplong: Alex, a few weeks ago, you brought concerns about changes to graduate student health insurance policies to my attention. The implementation of the Affordable Care Act (ACA), together with increased usage of the existing plan, have resulted in a projected increase in health care costs for graduate students in 2014-15.
Prompted by your concerns, I have looked into the situation further, so let me start with some of what I discovered. The actual cost of graduate student plan last year was 105% of the insurance premiums received. Normal usage is up to 80% of the level to which the plan is funded. As a result, even with no changes due to the ACA, premium rates set by Aetna would have increased in 2015 by a minimum of 30% based upon the usage of the benefits.
According to a March 26th memo from Jean Vasilatos-Younken, Interim Dean of the Graduate School, although the new plan will be more comprehensive, Aetna (Penn State’s student medical plan insurer) has projected an increase to premiums of 30%, an increase to deductibles (from $75 to $250 for individuals; from $225 to $500 for families), a reduction in coverage from 100% to 90% for in-network service (with an out-of-pocket max. of $1350 for individuals and $2700 for families), and the adoption of a $150 co-pay for emergency room visits (which is waived if the individual is admitted to the hospital).
Students are understandably concerned about these changes, and I thought we might discuss those concerns here and open a wider conversation about possible ways to respond to the situation.
Alex Feldman (Graduate Student in Philosophy): Thank you for inviting me to contribute. I think the major concern right now for us is to ensure that our voices are heard in the decision-making processes, that administrators and insurance representatives understand our situation, and that whatever decision is made is fully transparent.
Graduate students did not receive any form of notification about the proposed changes to their plan until February 25 of this year. They did not have a chance to discuss the changes with administrators until March 27.
The changes have been presented to us as largely inevitable consequences of the Affordable Care Act (ACA, aka “Obamacare”). Without getting into the technicalities of the law, I would just like to say that graduate students need a better explanation than the one we have effectively received: that our current plan is too good to be legal under the new law. “Large group plans,” for example, are not subject to the same legal requirements that Aetna is using to justify our benefits reduction. (Harvard Pilgrim Healthcare has a good fact sheet on this.) We would like to make sure that the university is actively considering all options for graduate insurance.
@deancplong: I think it is critical for graduate student voices to be heard and for the process to be as transparent as possible, which is why I appreciate your willingness to engage in this public discussion here on the blog.
The proposed changes to the health plan for graduate students certainly caught me off guard and from what I can tell, the proposed increases were not anticipated by the upper administration either. Dean Vasilatos-Younken has told me that we now have a third-party consultant looking at the plan to assess if what Aetna has projected is really required by the ACA. If it is, the consultant will help us look into how best to address the situation under those constraints. So it is not just the graduate students who are looking for a better explanation about the impact of the implementation of the ACA.
Alex Feldman: Yes, I understand that insurance companies are using the ACA nationally to justify increased costs for many vulnerable groups. The Centre Daily Times, for example, recently reported on the effects of the ACA for rural residents. I urge the university to enter into dialogue with other groups affected by the law and to advocate on behalf of all members of the Penn State community.
@deancplong: I know the university is trying to address this issue with a wide swath of faculty, students and staff. With regard to graduate assistants, the university has said that the University contribution for plans that cover family members will be increased to 75% (up from 70%) for plans that cover a spouse/domestic partner or children, and to 76% for the family plan (up from 70%). They have also agreed to maintain the current 80% subsidy for individual plans.
Alex Feldman: Yes, I read about that, but this solution would leave out the thousands of graduate students who are not currently subsidized by the university. A better solution, in my opinion, would be to extend a cost-offsetting subsidy to all graduate students, regardless of whether they are on assistantships or fellowships. Administrators at the March 27 meeting suggested a 3% raise, but it is not clear how helpful this amount would be after increased taxes and inflation. If the university does want to pursue stipend raises as a solution, I would urge them to give a flat amount to all graduate students, rather than a percentage-based raise, which disproportionately benefits those at the top while doing little for those most in need.
@deancplong: The March 26th memo did mention the possibility of a 3% raise, which I took to be a very good development considering that faculty and staff rarely see raises as high as 3% in a year. I understand that this increase, together with the increased University contribution to the higher cost plans, will offset the anticipated increase in monthly premiums for all graduate students. (I have some examples that I’ll post in the comments.)
Still, your point is well taken that we need to consider how to ensure that those who are most in need of help receive it. My understanding is that a Task Force is being established to investigate other options to address those additional needs.
There are a number of other issues at stake here as well, including the question of how to ensure a “living wage” for graduate students. Perhaps we could take that up in a separate post but open it up here for the thoughts and ideas of those who may be following along with us.
What concerns do you have about the changes to graduate healthcare coverage? What suggestions do you have to effectively address the situation? How can we further facilitate thoughtful discussion about this issue?
To add to Spencer’s comment, while the 80% is now the legal minimum, prior to the Affordable Care Act, very few student health insurance plans achieved that level. Most were, like Penn State’s plan, in the 65-75 percent range. Whether that’s a sign of the administrative complexity of providing insurance to student populations or the excessive profits of insurers is an open debate. The Department of Health and Human Services, in recognition of this, allowed insurers in this market to use a multiplier (of 1.15) to adjust their ratio last year. If insurers do struggle to meet this minimum, they’ll drop out of the market, making it even harder to find good coverage.
Many of the things mentioned here–network coverage, dependent coverage, etc.–are all things the Student Health Insurance Task Force is actively investigating in hopes that we can address concerns and find solutions. I welcome all of your comments to help us understand the situation.
I would like to point out one issue that has apparently been circulated to faculty by admin, since I’ve seen the same wording from other sources.
“Normal usage is up to 80% of the level to which the plan is funded.” The way this is phrased is a bit misleading – 80% is the minimum legal usage rate, not any sort of standard maximum. Were usage below 80%, it would put Aetna in violation of federal consumer protection mandates and they would be required to issue a rebate. And in fact, for group plans the minimum is 85%.
It seems like a minor, pedantic point, but it reframes the nature of the situation by calling a worst-case scenario the new best-case scenario. Aetna would probably prefer to overcharge and then issue a rebate rather than charge a standard price and risk a situation like this year, where usage was high and they didn’t make money off the deal. But if not to absorb those risks, why do we have insurance companies?
I am a graduate student with a below-average stipend and a family. Aside from not receiving the full $555 for the “average” GA, I am concerned about the fact that in-network care won’t be fully covered, since the University Health Center does not offer pediatricians. I have a 19-month-old who still goes for regular well-baby visits, vaccinations, and the typical sniffles, ear-infections, colds, viruses, etc. She goes to the doctor far more often than I do, and I’m concerned that the 10% that will no longer be covered will add up to quite a lot over the course of my next 5 years here.
This lowered coverage rate also raises important questions about graduate students who start families or grow their families while here at PSU, since I’m pretty sure the Health Center does not have an obstetrics unit either. How much will it cost to have a baby with this new plan? I just hope that the university is keeping in mind those with families, or who plan to start families, who are often barely scraping by on the stipend to begin with. Yes, we are a “minority” within the grad student population, but we are also the some of the most vulnerable to financial changes.
The problem isn’t the cost of insurance; it is the deplorably low wage we’re paid as graduate assistants (I’m not singling out Penn State here). Sure, I *officially* work 20 hours a week, which would justify my pre-tax stipend of around $18,000. But let’s all be frank here: I know I’m not the only grad student who, in actuality, routinely works 70-80 hours a week. While I could theoretically refuse to work anything beyond the 20 hours stipulated in my employment contract, at that rate, I would be lucky to finish my dissertation in 15-20 years. That wouldn’t be a problem if my funding wasn’t automatically cut off by my department at the end of the six-year term I’ve been promised in my initial offer.
Until the university stops paying grad students at just above the poverty line and starts compensating us for the work we’re actually performing, we’ll, for the most part, never been able to afford increased insurance without some drastic reductions in the quality of our lives.
How about this for a fair compromise with the administration: keep my salary as it currently stands; make any necessary adjustments to insurance rates as required by Aetna and the ACA; but crack down on departments and professors requiring grad assistants to work beyond 20 hours a week.
I get that will never happen because it would be impossible to meet the demands of grading papers; finishing our own coursework; and writing a master’s thesis and/or dissertation by only working 20 hours a week. Then raise our salaries.
Thank you both for having this discussion and opening it up to the community of Penn State grad students. You provide a concise description of the current situation and include information that I had not previously been aware of.
One bit of new information for me is that the University has asked a third party group to investigate whether the Aetna cuts are the necessary course of action. Should they find that these are the appropriate measures in accordance with the ACA, the problem remains, how will graduate students afford the raise in costs.
One surprising development for me occurred two weeks ago. Last week, I had sinus surgery. About 6 days before surgery, I received an email from Aetna stating that starting April 1, my physician would no longer be “in network”. Has there been any information provided in regard to the number of physicians that will be maintained “in network”? Is there a concern, secondary to that of cost, which is whether the quality of “in network” care will remain the same?
Following up on the question of the degree to which the 3% raise will offset the increased premiums, here is an example of how it should play out, recognizing that the average stipend is just that, an average so Alex’s point about those most in need remains something to be addressed.
The pay increase from a 3% raise to a graduate stipend of $18,488 (the average stipend for ½-time GAs across the University) will yield $555, of which (according to the University) you will spend less than $300 on increased premiums (the maximum increase, which is for the family plan, factoring in the increased University contribution), leaving $255 for taxes and to offset a good portion of even the highest increase in deductible (an increase of $275 for the family plan).
For the individual plan, to which the majority of GAs subscribe, the increase in premium costs over the current plan is $139, which would leave $416 to offset taxes, increased deductible costs, as well as some co-pays if needed.
Also, I should note that the deductible and 10% co-pay is waived entirely for services offered at the University Health Center. This includes prescriptions at the UHS pharmacy, appointments with physicians or nurses for colds, aches, pains, etc, gynecology, laboratory work, radiology, physical therapy and other “normal” (non-emergency) visits, and this is true for all students, not only GAs.