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A campus committee is reviewing a private health insurer's bid to provide medical coverage for thousands of аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis students after Chancellor Linda P.B. Katehi accepted that committee's recommendation to leave the medical plan of the University of California's Student Health Insurance Program (аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP).

аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis decided last week to withdraw from what had been the systemwide student insurance program after the chancellors of the 10 аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ campuses agreed unanimously with a regarding аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP. At the same time, аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis also decided to remain with аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP's dental and vision plans.

"All changes to the health insurance plan were made with students in mind," said Erin Legacki, chair of the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis Student Health Insurance Plan Committee and a doctoral student in animal biology. "Our main goal was to find an affordable health care plan for all." Legacki and her committee are now reviewing a proposal from Aetna Student Health to provide medical coverage for аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis students.

That 21-member committee at аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis and those on other campuses have been grappling with the same challenge, after learning in January that the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP plan would have an accumulated deficit of nearly $58 million by Sept. 22, the end of the current 2012-13 plan year. аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis' share of the deficit is projected to be $10 million.

Even the double-digit premium hikes that аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP proposed for next year — 22 percent for graduate students and 35 percent for undergraduates at аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis — would do nothing to eliminate the medical plan's deficit. 

At their meeting last week, the chancellors approved the systemwide advisory board's recommendation that аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP premiums be excluded as a source for recouping the accrued deficit. The аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Office of the President is reviewing options for dealing with the deficit.

Legacki, who is also the campus organizing director of the Graduate Student Association, said that аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP has been poorly managed by plan directors and students were disappointed that information about the deficit was not known and shared earlier.

Doctoral student Angela Monterrubio served as the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis representative to the systemwide advisory committee.

аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis has 9,700 undergraduates and 4,167 graduate students enrolled in аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP in the current academic year; undergraduates pay $1,380 annually and graduates pay $2,280 for medical, vision and dental insurance coverage.

The University of California requires students to have health insurance, and аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis enrolls students in the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP program unless they can show proof of comparable coverage. (Students in the Working Professional MBA program are not required to have health insurance).

Begun three years ago, аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP uses a self-insurance model for its medical plan, so rates are based on paid medical claims with no guarantee of protection from deficits or significant rate increases. However, аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP's dental and vision plans are fully insured with deficits covered by private insurance carriers and rates capped for three years.

аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis was not alone in its decision to leave the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP medical plan but to continue with the dental and vision plans. аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Santa Barbara made the same choice.

Also leaving the medical plan but keeping the dental and vision plans will be аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Irvine undergraduates and аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Riverside graduate students. аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Berkeley will leave the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP medical, dental and vision plans.

The аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis committee has reviewed proposals from three insurance providers — Anthem BC, Aetna and United Health Care — and voted to move forward with Aetna, which offers lower rates and provides a guarantee that any increase in its second-year rate would not exceed 12 percent. 

The current Aetna bid does propose double-digit premium increases for graduate and undergraduate students. To reduce the proposed rate increase, the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis committee recommended modifying medical plan benefits by increasing the following:

• co-insurance to 20 percent from 10 percent;
• the deductible to $300 from $200;
• emergency room co-pays to $200 from $100; and
• office visit co-pays to $25 from $20.

Importantly, as a fully insured plan, Aetna would not expose the university or its students to the risk of another deficit. Aetna Student Health has about 500,000 members at 200 colleges and universities in the United States.

While аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢OP leadership has decided to lift the lifetime and pharmacy caps for аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ SHIP, аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis will eliminate all caps on claims to be compliant with the federal Affordable Care Act.

Associate Vice Chancellor Lora Jo Bossio oversees student health and counseling services for Student Affairs. "аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis is committed to making this a healthy and sustainable plan," she said. "We owe this to our students."

Dr. Michelle Famula, executive director of the Student Health and Counseling Services, said аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis mitigates costs through health education and promotion programs, monitoring outside referrals, offering significant in-house consultant services and partnering with the аÄÃÅÁùºÏ²ÊÄÚÄ»ÐÅÏ¢ Davis Health System in several areas of health care service.

Famula said Student Health and Counseling Services is also looking at other opportunities for collaboration with the health system to improve access to care and reduce plan costs.