Wednesday, January 30, 2013

Issue of UC Health Cap for Students Heats Up

We noted in a prior post this past weekend that there is a cap on the dollar payouts for student health insurance at UC.  Major illnesses can cause students to hit the cap. Below is an excerpt from a San Francisco Chronicle article that seems to imply - but doesn't quite say - that UC chose self-funding of the student health plan to avoid a ban on such caps in the Obama health plan: 

Health care limits like the one imposed by UC are already illegal under the sweeping federal health-care law - dubbed Obamacare - that takes full effect next Jan. 1. But the health care act does not apply to "self-funded" college plans like UC's, in which the university takes on the financial risk of medical claims…

UC officials say they're weighing their options but are hesitant to voluntarily lift the caps until they know what it would cost - and how much they'd have to raise the price of student health care to pay for it.  “It's a front-burner issue," said Peter Taylor, UC's chief financial officer, who became aware of the problem last summer. "We're not making a profit on (student health care) - but I can't afford to lose money, either." ...

UC switched to a self-funded system in 2011, not long after the federal prohibition on coverage limits took effect in September 2010. Most of UC's 10 campuses limit coverage to $400,000. Students at UCLA pay more for a $600,000 limit, while graduate students at UC San Diego pay even more for a $750,000 cap. Far lower caps exist for subsets of coverage, including prescriptions…

UPDATE: Inside Higher Ed has a report on self-funded university plans:
[There is no mention in this article that there are plans afoot in Washington to require that such plans not have benefit caps.]

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