September 12, 2013

Rates for Cornell Student Health Insurance Plan Jump Up 10 Percent

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To keep up with increasing requirements brought on by health care reform, the cost of Cornell’s Student Health Insurance Plan rose 10.7 percent this academic year, according to Gannett Health Services officials.

The rise in the health plan’s price from $1,998 last year to $2,212 this year was one of the largest hikes the University has ever announced, according to Craig McAllister, director of Risk Management and Insurance and chair of the Student Insurance Advisory Committee. In the last decade, the average annual increase in SHIP’s price has been more around five percent, according to Valerie Lyon, associate director for business and finance at Gannett Health Services.

Lyon partly attributed the jump in the plan’s cost to President Barack Obama’s Patient Protection and Affordable Care Act. The law, which was passed in 2010, has expanded requirements for the coverage health insurers provide to their customers — meaning premiums for SHIP have had to rise to keep up, according to Lyon.

SHIP costs have also risen because of inflation in the healthcare marketplace and a jump in students’ uses of SHIP last year, according to Lyon.

“It’s not [a question of] ‘where’s the money going,’ but rather what happened in the previous year that makes the rate what it is,” said Jo Ann Molnar-Kieffer, student insurance administrator. “It’s a review of the previous year’s claims experience that sets the rate.”

SHIP is used by about half of Cornell’s student body. As a “platinum-level” plan — which under the ACA, means a plan covers 90 percent of a customer’s health care costs — SHIP has continued to expand benefits this year, according to the University.

For instance, the ACA has required that SHIP move from capping pharmacy expenses at $4,000 to providing unlimited benefits for prescriptions, according to McAllister.

“That change increased cost and was quite a driver for the increase in the price this year,” McAllister said.

Despite the increase in SHIP’s rates, University officials defended the health insurance plan, saying it offers the community comprehensive health care benefits without undue expenses. In fact, at some large state institutions and community colleges, students have had to go without university-provided health plans because schools could not comply with expanded benefits, McAllister said.

“The Affordable Care Act eliminated these high-end caps on plans, so if someone has a very serious illness or injury, their insurance isn’t going to run out,” McAllister said. “But on the other side, some of the benefits that some of these smaller plans had with low cost-sharing and low out-of-pocket are going away. The Cornell SHIP has always tried to balance that.”

According to McAllister, the majority of SHIP’s changes were not optional, but were required by health care laws. Any enhancements that Cornell has direct control over are decided with administrative and student input during SIAC meetings, he added.

A lot of these “enhancements” to SHIP coverage are made in order to lower cost-sharing, or the portion individuals have to pay out of pocket for their services. According to Lyon, this past year, SHIP cost-shares were made more consistent so that, in line with the established $10 co-payment for every Gannett visit, surgery co-payments are now $150 across the board.

Other Cornell-decided enhancements included increased coverage for preventative services like STI tests, immunizations and screenings, as well as contraceptive coverage, according to Lyon.

Even so, the SIAC maintains that SHIP is cheaper than comparable self-purchase plans, which can cost as much as $8,000 a year.

“It’s important for students to look at peer institutions; look at the overall cost of our plan and compare, and you’ll see that [SHIP] is actually one of the lowest-cost plans in the Ivy-plus peer group,” Lyon said. “While it’s challenging to think of the $2,000 as inexpensive, as it relates to health insurance it’s relatively low-cost.”

According to Molnar-Kieffer, discontent with the cost of SHIP often relates only to the sticker price of the plan without taking into account that seemingly cheaper plans may be employer-subsidized or have very large deductibles.

“A lot of times it’s comparing apples and oranges; just looking at the price of an insurance plan doesn’t really relate to the value you get from it,” Molnar-Kieffer said. “You might have huge out-of-pocket expenses, especially if the price is lower.”

McAllister addedd that health insurance costs are ever-increasing by nature due to factors like increased technology and general medical awareness. He added that the main goal of the SIAC is to keep the rate of increase stable while providing the necessary benefits. Part of the discussion includes cutting costs wherever able.

Katy Reines ’14, the undergraduate representative on the SIAC, calls it “a constant struggle” to change health plan costs without putting the burden on students.

“As students, we don’t necessarily have a wealth of money just to spend on health care in any given moment,” Reines said. “[The SIAC] has discussed in length if we should change a certain portion of the plan that would make a student have to pay $25 extra at the time of the service, or if it’s worth it to keep the overall price of the plan slightly higher in order to make the student pay less at the time of service. … We recognize that as students $25 or $50 can be a lot of money.”

This year’s 10.7 percent increase was still lower than what was originally expected. According to Lyon, deliberations in February with SHIP provider Aetna worked with a prospective increase of near 20 percent.

“We’re looking for full transparency on the rates,” McAllister said. “Wherever we feel that [Aetna] may be looking to make extra profit, we push back and try to have that removed from the rate.”

Still, McAllister said he expects more increases in SHIP’s cost over the next few years as the new benefits that come with federal and state health care reform are utilized by students.

“That being said, we continue to work to have the right mix of benefits, and also make sure that the insurance company ‘sharpens their pencils’ when it comes to the rate they’re providing on that,” McAllister said.

Reines said she has been impressed with the other members’ commitment to students and how they work with Aetna to keep profit to a minimum.

“From the student perspective, the strongest feeling I get from being on the committee is to actually trust these people,” Reines said. “There’s no need to have mistrust, or that somehow you’re paying for someone’s profit. The whole point of this is that we as students are healthy and can go to school and learn, because that is why we’re here.”