October 6, 2013

Cornell University Looks at Obamacare

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On Oct. 1, the new Health Insurance Marketplace opened for enrollment as part of the Patient Protection and Affordable Care Act. The act requires all individuals not covered by an employer-sponsored health plan or public healthcare such as Medicare and Medicaid to enroll in a private insurance plan on the marketplace.

These privately-owned plans, known as exchanges, are broken down into Platinum, Gold, Silver, and Bronze plans based on their premium cost — the sticker price — and their level of coverage. Platinum plans cost the most and have the highest coverage, while bronze plans cost the least and feature the lowest coverage.

Gannett Health Service staff spoke to The Sun regarding how the new marketplace will affect students.

“Young people are really a big piece of this story, because historically they have been uninsured in such high numbers,” said Jennifer Austin, health communications specialist at Gannett. “College students who have insurance will be bombarded with the same media messages as those who don’t. It may confuse them, making them think ‘maybe I need a different plan’ or ‘my family needs something different.’ “Part of our job at Gannett is to to help students on SHIP take a breath and say, I’m fine; my insurance already meets those requirements.’”

According to Valerie Lyon, associate director of business and finance at Gannett, students fall under the group of “young invincibles,” people under 30 who are less likely to suffer from illness and have traditionally been uninsured in high numbers. With the new marketplace, a lot of advertising will target young invincibles, including college students.

Such marketing may suggest that the cheaper bronze or silver-level plans are the best option for a healthy college-age individual. However, these plans usually feature higher out-of-pocket costs that can run into the thousands of dollars if faced with an unexpected injury, according to Craig McAllister, director of Risk Management and Insurance for the University.

“Most people don’t plan for a broken arm,” McAllister said. “Injuries happen, and many times those are the unexpected costs where the out-of-pocket expenses on the bronze plans and the silver plans can really come back to get somebody. The maximum out-of-pocket can be over $6,000 on those plans, where if you look at the higher valued plans such as the Student Health Insurance Plan, those maximums are much lower.”

Lower-cost plans will also require a higher out-of-pocket expense per doctor’s visit, which Lyon said may deter students from getting the care they need. Lyon said that, with health insurance, “small barriers loom large.”

“If it costs you more money to go to the doctor, you’re less likely to go,” Lyon said. “However, the Bronze plans are being marketed as a great choice for a young invincible, because those people aren’t expected to need health care often. That’s the last thing we want — for students to have a plan that limits their access. We want people to use their plans, to go and get care when they need it so that a small health concern doesn’t turn into a more expensive issue that’s going to take them away from school.”

According to Lyon and McAllister, students who will remain on the University-offered Student Health Insurance Plan or on their parents’ employer plans generally do not really have to worry about looking at the new marketplace’s exchanges. The new marketplace is, according to Lyon, largely intended for people who have not had access to affordable options before this point.

“There’s going to be a lot of information that’s coming at young adults,” Lyon said. “Really, if you’re already on the student health plan, you’re fine, you’re set, you don’t need to do anything. If a family loses health insurance in January then the parents will need to think about what plan is going to work best for their student here in Ithaca, New York. They will need to take the in-network coverage into consideration as they’re looking at options and pricing.”

For students looking at exchanges, the portability of the coverage — whether an individual is covered by their plan unrestricted by geographical location — is also an extremely important factor, according to McAllister.

“Many of the ways they’re able to keep the price down low on some of the exchanges is by narrowing the network, or coverages available,” McAllister said. “As opposed to being in a network in California that may be statewide, it may only cover southern California or northern California or even be more restrictive than that in some cases. With Ithaca, many of the [Health Maintenance Organizations] around the country don’t have a network that responds in Ithaca.”

Another factor, which especially applies to students with spouses and families, is to see what federal subsidies might be available on the exchanges. According to Lyon and McAllister, family coverage found on some of these exchanges might be much more affordable than SHIP due to subsidies.

“Some students’ families, their dependents, are currently on other New York State programs, like the Child Health Plus,” McAllister said. “With the subsidies and other [factors] based on income, it can certainly be much, much less than the Cornell rate, which isn’t subsidized for anybody.”

In regard to institutionalization of the Affordable Care Act, Lyon and McAllister said they find the White House’s goal of getting young people insured a promising endeavor.

“Once we get past the political dynamics on this, I think in the end those who were uninsured before will be very happy that they’re insured now,” McAllister said. “Longer term, it will be good for everybody, even those who currently have insurance, because we’ve been subsidizing everyone who doesn’t have insurance through health care costs, through hospitilization and emergency remedialization.”

Coverage will go into effect on Jan. 1, 2014, and open enrollment continues until March 31, 2014, according to the federal marketplace website.