UC Student Health Insurance Plan

Case study - updated 11/2012

Background
Historically, the ten University of California campuses, plus UC Hastings College of the Law, have managed 11 separate insurance plans.  These plans provided coverage for services beyond the primary care available in campus Student Health Centers and Counseling Centers through an insurance network. In 2007, Vice Chancellors of Student Affairs and the Council of Graduate Deans expressed interest in exploring a system-wide graduate student health insurance plan (GSHIP).
Goal

In 2008, the GSHIP Workgroup’s charge was to undertake a fresh examination of the structure of graduate student health insurance, to determine the challenges and advantages of creating a system-wide consolidated plan.  When results of the initial market analysis showed significant opportunities for stronger benefits and cost savings, the goal became the launch of a multi-campus graduate student health plan in Fall 2010.

Following successful implementation of the graduate plan, a new goal emerged.  Undergraduate students would be incorporated into the system-wide plan by Fall 2011, as well as graduate students on all campuses.

Successes
Beginning with Fall 2010, UC created a systemwide health insurance plan including medical, dental, and vision coverage for graduate students and their dependents. Up to 14,000 graduate students at six UC campuses are participating in the plan in Fiscal Year 2010‐2011. The plan achieves operational efficiency and savings across the system by consolidating administration at UCOP. The medical plan is self‐funded, resulting in additional cost savings by removing carrier retention and broker fees from the premiums.Also in 2010, the Work Group began to study and develop an integrated, system-wide SHIP plan to serve undergraduates.  All nine undergraduate campuses will participate in an integrated student health insurance plan starting in Fall 2011 that offers medical, dental and vision benefits to students and their dependents.  In addition, graduate students on the remaining five campuses joined the plan, resulting in full participation in the new “UC SHIP” by all campuses.  135,000 students were enrolled.

In 2012, UC SHIP became a Risk Services program within the Finance Division at UCOP.  The original Work Group was disbanded and the newly formed UC SHIP Advisory Board and Executive Committee  conducted their inaugural meetings.

In Fall of 2012, as UC SHIP began its second year with all campuses participating, enrollment increased 2.4% over last year, with 139,000 student members.  Benefits have been adjusted in accordance with requirements of the Affordable Care Act.  A brief summary of Plan enhancements for 2012/13 include the following no cost benefits for students and dependents: FDA-approved generic contraceptive drugs, including brand name drugs with no generic equivalent; FDA-approved contraceptive devices administered in a doctor’s office; female sterilization if performed inpatient or outpatient but not as part of another procedure such as a maternity delivery; coverage for network major dental services increased from 50% to 70% for members participating in the dental plan.  In addition, students also have no cost Tuberculosis screening at Student Health and psycho-educational testing to assess and diagnose learning disabilities, a benefit of up to $2,000 in a student’s lifetime.

Challenges

Student health insurance plans have historically been negotiated at the campus level, and Student Health Centers have developed plans specific to the needs of their distinct student populations. In the first year of the plan, having only six campuses participate has caused a higher temporary cash flow gap and slowed the growth of the stabilization fund. Additionally, the UAW (representing approximately 22% of graduate students) is unsatisfied with the lack of participation from all campuses in the system-wide plan.  Access to  in-network mental health providers has been challenging in regions where many  providers opt not to participate in carrier networks. Finally, variations in scope of services and operational practices have made it difficult to implement the standard benefit structure in a consistent manner across all Student Health Centers.

In the second year of administering UC SHIP across all 11 campuses, including UC Hastings College of the Law, the UC SHIP office has worked to craft Plan policies that are consistent across all campuses in several key areas:  First, to comply with the Regents’ insurance mandate that all registered students must have adequate health insurance as a condition of enrollment, the UC SHIP office is working to define which student groups systemwide should be automatically enrolled in the Plan; second, this year for the first time a common set of waiver criteria that must be met in order for students to waive enrollment in the Plan were adopted on all campuses; and third, the governance committees for UC SHIP are developing referral guidelines that provide students access to appropriate levels of care, protect the Plan, and foster consistent referral practices at student health centers systemwide.  Constant change in health care reform makes long-term planning challenging, requiring development of multiple strategies.  Students seem to love the Plan and are using the comprehensive benefits available to them, which has resulted in higher than expected claims, in part due to “pent up demand” for stronger preventive care and other health care services.

Initial investment
The initial study undertaken by the GSHIP Workgroup was funded through the Executive Vice President–Business Operations (EVP—BO) budget at a cost of $205,000. Implementation and start‐up costs of the GSHIP system-wide plan are expected to be $470,000 and will be reimbursed to the EVP—BO budget by the plan. Implementation and start‐up costs for an integrated, system-wide SHIP plan are expected to be $830,000. Start‐up costs will be shared across all campuses regardless of initial participation date; therefore, EVP—BO budget reimbursement will occur when all 11 UC campuses are participating in the plan, which is targeted for Fall 2011. With all 11 campuses participating, plan enrollment is estimated at 120,000 students (about 45% of undergraduates and 80% of graduate students). Thus, start‐up funds can be recouped by adding $6.92 to the annual health plan premium for each enrolled student for one year. Additionally, the GSHIP program was granted a UCOP‐funded C3 (Cross‐Campus Collaborations) loan of $7.1 million to provide back‐stop funding for initial claims costs that may be incurred prior to the transfer of sufficient premiums from the campuses. C3 loan funds will be accessed only to pay claims and only if claims expense exceeds premium collected.
Fiscal results, current and anticipated

The average 2009‐2010 rate change across all campuses was +8% (ranging from ‐6.5% to +20% over previous year). The average 2010‐2011 rate change across the six participating campuses in the system-wide SHIP plan was ‐4.3%, (ranging from ‐ 11% to +4.5% over previous year). Total aggregate expenditures for GSHIP on all 11 campuses are estimated at $72.9 million for 2009‐2010. Total premiums collected for GSHIP on the six participating campuses will be $28.4 million. The health plan is funded by premiums billed to students. Premiums for student enrollment may be paid by graduate division fellowship programs, by other campus departments, through fee remission for graduate student employees, by agencies providing student aid, or by students. Premium for dependent enrollment is paid by students.

UC SHIP will save students $8.4M in premium in the 2011-12 year.   The plan incorporates strong benefits from each of the existing plans, and students will receive about $5.4M in new benefits.

Concluding statement
Cost containment, benefits enhancement, administrative efficiency are the overarching objectives of this initiative. A comprehensive health plan provided through robust services at Student Health Centers and Counseling Centers and augmented by an extensive insurance network enables students to access care throughout the United States. This is an important component of UC’s broader effort to enhance student support, improve student‐recruiting competitiveness, and increase retention/degree‐completion rates of our talented student body.