Student health insurance contract finalized

UNIVERSITY PARK, Pa. -- University officials were able to negotiate a smaller increase in health care premiums for Penn State students for 2014-15 with insurance provider Aetna. The University finalized its contract with the firm on May 13, achieving a drop in planned premium increases of nearly a third for all students who will be utilizing the plan. The Aetna Student Medical Insurance Plan serves all students: undergraduates, graduate students, medical students and law students.

"When I spoke to graduate students at the town hall meeting in March, I indicated that we were working to blunt the impact the proposed plan changes would have on our students," said Nick Jones, executive vice president and provost. "Part of that work was to negotiate further with Aetna, and through those negotiations we were able to secure a smaller increase in premiums (21 percent) than originally proposed by Aetna (30 percent). That's a savings that will directly benefit all covered students."

For graduate students supported on assistantships, fellowships and training grants, this overall savings, combined with the previously announced increases in University contributions to premiums for spouse/domestic partner or children (75 percent) and for family (76 percent) plans, and the commitment to maintain the University contribution for individual plans at 80 percent, will result in the following total net increases in premiums for graduate assistants, graduate fellows and trainees for 2014-15:

-- Individual Plan: $98
-- Graduate assistant plus spouse/domestic partner: $114.47
-- Graduate assistant plus children: $107.87
-- Family: $11.32

In addition, the new plan includes the following changes:

-- Addition of pediatric dental benefits.

-- Addition of pediatric vision benefits.

-- Removal of day/visit maximum for inpatient and outpatient substance abuse treatment, in compliance with Federal Mental Health Parity.

-- Increased annual deductible of $250 for individual (up from $75); $500 for family (up from $225).

-- Addition of $150 co-pay for emergency room visits.

-- Coinsurance amended to 90 percent of negotiated charge for in-network care and 70 percent of recognized charge for out-of-network care. Services at University Health Services and Milton S. Hershey Medical Center Fishburn Clinic will remain at 100 percent for covered services.

-- Addition of in-network, out-of-pocket maximum of $1,350 for individual and $2,700 for family, including all copays, deductibles and coinsurance.

For complete details regarding cost increases and plan benefits, visit the University Health Services website, which is in the process of being updated with the new plan information.

Penn State had to finalize the contract now with Aetna to comply with Pennsylvania law, which requires 45 or more days between the time the contract is signed and when it is implemented. Because the plan covers different categories of students, there are different starting dates for their programs of study. Since first-year medical students begin their program of study at the College of Medicine with orientation beginning July 16, the new plan must be in place by that date.

"Although we have a plan in place for 2014-15, our work is far from done," said Jones. "We still have a number of important issues to address on this topic as we look to the future. Through the work of the task force we formed on April 29, we will continue to explore means to mitigate the impact of rising health care costs on our student populations. While we cannot fully absorb all the increases that are imposed, we can and will continue to work to lessen their effect on our students' finances."

Chaired by Dennis Shea, associate dean in the College of Health and Human Development, the task force has been charged to:

-- explore the interpretation of how the Affordable Care Act (ACA) applies to the Penn State student health insurance plan, using information provided by Penn State's insurer, Aetna; its consultant, Towers Watson; and, if necessary, other sources internal and external to the University.

-- examine factors that contribute to the rising costs of coverage independent of ACA, including plan utilization, review the short-term cost mitigation strategies proposed by the University and others, and recommend approaches to control costs and ensure equity and prevent hardship during the life of the existing student insurance contract with Aetna and that may be appropriate for future contracts.

-- review the longer term challenges and opportunities facing student health insurance at Penn State linked to rising health care costs and health reform, and to identify recommendations for the University to implement or explore with the goals of ensuring access to quality, cost-effective care for current and future students.

For questions related to Penn State's student medical insurance plan, contact the Student Insurance Office at uhs-insurance@psu.edu or call 814-865-7467.

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Last Updated June 25, 2014