In recent months, major changes have eviscerated grad student healthcare coverage while increasing its costs. How did what was once a solid healthcare package become so paltry so quickly? Can anything be done about it?
BY BRIAN COMFORT
When Adina Giannelli found out she was pregnant last spring, she was naturally pretty excited about having a kid. There were concerns of course, as every expectant parent might have, but healthcare coverage was not really one of them. Though money is always tight for most grad students, as a GEO-eligible grad student in the public health department, Giannelli knew she had a pretty good healthcare package in the spring of 2011. It was one of the reasons she chose UMass for her grad studies.
A few months pregnant, Giannelli traveled to Russia this past summer to conduct research. Healthcare was very much on her mind, but in this context she was concerned with finding out more about maternal health in Russia, in particular how drug use and abuse among pregnant women was dealt with. She interviewed obstetricians and pediatricians and even had a chance to see Russian maternal healthcare up close and personal. She had her 20-week check up in a Russian hospital. She knew going into the trip that Aetna, the UMass health insurance provider, would not cover any of the visit, which included an ultrasound and a lengthy consultation with the obstetrician. The total bill came to about $300.
Just a few weeks later, Giannelli received the same email that her fellow UMass grad students received outlining changes to our healthcare insurance. The new “co-insurance” would mean that Giannelli would now be paying 15 percent out of pocket for each of her remaining visits to check on the health of her baby and the progress of her pregnancy. These visits, two to three per week, end up costing her about $300 each, paying the same amount for 15 percent of the tab what she paid for 100 percent of an equivalent visit in Russia. These costs end up being about equal to her income as the Graduate Women’s Network Coordinator at the Graduate Student Senate, leaving no money left over for food, rent, or any other staples of living.
She expects to easily reach the $5,000 cap put on these “co-insurance” payments by the time she gives birth. And thus far there have been no complications; it’s been a problem free pregnancy, health-wise. It rankles her when UMass administrators glibly pronounce that most “regular” pregnancies will “only” cost students $2,000 to $3,000.
“For administrators who earn six-figure incomes, these costs may seem minor,” she said. “But for full-time students living on part-time incomes, the costs are wildly prohibitive, and have a chilling effect on our ability to remain enrolled in school.”
Not only pregnant women are affected by the changes. One grad student in the College of Humanities and Fine Arts with a preexisting condition (who prefers to remain anonymous to protect her privacy) has seen her medical costs skyrocket since this summer’s changes to Aetna’s healthcare insurance. For a chronic illness, she needs to receive infusions regularly, a procedure that the University Health Services on campus is unequipped to provide. Before the changes, these infusions were covered at 100 percent after her $250 deductible.
Now saddled with a 15 percent “co-insurance” fee, her last infusion cost her $800 while Aetna picked up the remaining $5,000. She needs these infusions every two months. Facing the prospect of having to pay that much money on a regular basis, she looked to alternatives and has ended up switching her medication to a drug covered by Aetna that costs Aetna $5,0000 per month but only costs her a $30 co-pay. This means that Aetna has now doubled its costs while the humanities grad student has had to switch her medication for no other reason than it was all she could afford.
“For my first two years at UMass, the health plan changed very little,” she said. “But this year’s astronomical increase in out-of-pocket expenses means I have to choose between my budget and my health. It’s dangerous to jump from drug to drug – especially when a medication is working well – but I have no other choice, since I’d like to continue to pay my rent and have a decent all-around quality of life.”
Major changes to UMass grad student health insurance plan (SHIP) were made over the summer with no student input and no advance notice even though the changes affect some 6,000 students, including 2,500 grad students. The university said the changes occurred as a result of regular negotiations with Aetna and other insurance companies and reflect an increase in healthcare costs that extends well beyond the university.
Since August, grad students have been required to pay, for the first time, a 15 percent “coinsurance” fee for any service performed outside of the University Health Services up to a maximum of $5,000. The plan deductible also increased to $250 from $200 and prescription drug co-pays rose. On top of these changes, UHS announced on Nov. 1 that UHS would be reducing its hours and closing its pharmacy, subjecting grad students to an even larger burden of the costs of their health care as the possibility that students will need care outside of UHS increases with the decreased hours of operation.
UHS director Bernette Daly said that the changes to the healthcare coverage were needed to avoid a roughly 30 percent increase in the individual premiums paid to Aetna. The premium instead rose by 17 percent. She indicated that the administration did not want to raise these premiums too high across the board, even while conceding that the new “co-insurance” will shift a disproportionate burden of the increases to those with chronic and on-going issues as well as women, particularly pregnant women.
Students enrolled in SHIP were never asked whether they would rather have their premiums raised across the board or have their insurance changed to “co-insurance” and potentially risk paying far more than a premium increase. In a meeting last month, GSS officers were able to convince UHS administrators to agree to have one graduate and one undergraduate student representative on the steering committee to give students a voice in their healthcare coverage and hopefully make the insurance negotiating process more transparent.
Daly also said that the reduction in hours were needed to cut costs and that the hours cut were typically slow hours and not the best use of current UHS resources. She also said the pharmacy did not turn a profit and that is why the decision was made to discontinue it.
People or Profit?
All these changes beg the question: What exactly are the goals of SHIP and UHS, to turn a profit or to serve a student population that by law is required to have insurance but is denied state subsidies regardless of how low their annual incomes may be?
Clearly, the economic downturn of the last several years has necessitated changes in the UMass budget. Demanding that UHS and SHIP be as efficient as possible is understandable.
What’s less clear is the downturn’s effect on large insurance companies like Aetna, who seem to be continually raising rates while cutting services. Yet, according to a press release summarizing their second-quarter 2011 financials, Aetna’s net income increased 9% to $536.7 million.
There is also some question about the financial needs of UHS. When pressed by members of Graduate Employee Organization, the school’s union for graduate student workers, regarding a public statement made by a representative of the administration last summer that part of the reason for the increase in health care costs was to cover a $500,000 deficit last year, Daly conceded that the deficit was due to a one-time “R&R” contribution that covered the repairs and large equipment purchases; an expense that, if spread out over several years, would actually indicate that the UHS runs a surplus every year.
Daly then said that the UHS actually projects to run at a net profit this year of about $2.5 million. A huge chunk of this revenue will be generated because in the past Aetna did not reimburse UHS for services given to SHIP enrollees, but under the new plan Aetna reimburses these services at a rate of 85 percent, which is projected to that $2.5 million. In short, part of the deal that saw our “co-insurance” become necessary is putting brand new revenue of $2.5 million per year into UHS coffers.
This money–in addition to the cost-cutting measures of reduced hours of operation, closing the pharmacy and laying off more than 20 workers as reported in the Hampshire Gazette on Nov. 9—is needed, UHS officials have since said, to prepare for facility and equipment upgrades, possibly including the construction of a new UHS building, some time in the future.
GEO has also filed a formal complaint with the state Division of Health Care Finance and Policy challenging the legality of the recent changes. Because students are required to have health insurance, yet are prohibited from receiving state subsidies for insurance, the health care packages provided by colleges and universities are held to different standards than typical employee sponsored health care. GEO’s complaint alleges that the “co-insurance” payments do not constitute “reasonable co-payments and deductibles” as spelled out in the state law.
Public health grad student Giannelli said she doesn’t know how long she will be able to continue her studies if GEO isn’t successful in its complaint.
“While the costs of health care are rising throughout the country, and this is a systemic issue that goes far beyond the reaches of our particular university, individuals on student health insurance are a captive audience,” she said.
“On the balance, people who rely on student health insurance plans lack other options. For some segments of the population, including the university’s growing body of international students, there is literally no choice but to be on this plan. As such, the university has a responsibility and an obligation to put the needs of students ahead of its financial interests. UHS operates at a $2.4 million surplus, while students, subsisting on marginal incomes, are unable to afford the services that are critical to our health, and the health of our families and children,” she continued.
The humanities grad student with a chronic illness indicated her plans haven’t changed, but she did worry about the future.
“I fear what further changes next year could bring,” she said. “Things are already dismal. Is it possible that they could get worse than this?”