Impact of the ACA on College
Health Programs
CCHA March 17, 2014
Jim Mitchell, MBA, FACHA
Director, Student Health Service
Montana State University
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ACA: The Big Picture
• Policy goals: Drastically reduce the number of
uninsured and improve quality of insurance coverage
• The new landscape of health insurance in 2014
 Mandate for most individuals to purchase health insurance if not covered
elsewhere
 Mandates for many employers to offer health insurance have been
delayed until 2015 (employers with 100+ employees) and 2016
(employers with 50-99 employees)
 Insurance marketplaces allow individuals and small businesses to
purchase coverage (small business marketplace delayed in many states)
 Subsidies for low income people with Medicaid expanded in 26 states(incl
DC); 19 states not expanding; 6 states are still debating the issue
 Barriers to coverage (pre-existing condition exclusions, lifetime limits,
medical underwriting) are removed
Provisions of ACA Implemented
Earlier
• Extend coverage of young adults on employer
plans to age 26
• Preventive care covered with no patient cost
sharing
• 80% medical loss ratios for individual plans
• Ramping up of requirements for student
insurance plans; must meet all ACA
requirements in 2014
ACA Addresses Quality Issues
in Student Plans
• Report by NY State Attorney General (2010)
 Many plans provide dangerously insufficient coverage
 Many plans return a low percentage of premium in
form of benefits
 Brokers, agents, consultants are often paid
exceedingly high commissions
 Contributions paid by brokers, etc. to colleges and/or
their employees leads to a conflict of interest
 There are often non-standard exclusions (e.g. alcohol
related injuries; attempted suicide)
Higher Ed Environmental Pressures
• Rising Cost/Increasing Student Debt
 Cost Centers Will Be Critically Reviewed
 Activities Will Need to Justify Themselves on Basis of Importance to
Educational Mission
 Non-essential Services Will Be Eliminated
 Outsource Where Possible
• Retention and Graduation Rates (particularly in public
sector)
• Debate about Mission of Higher Education and Learning
Outcomes
• Disruptive Innovation (MOOCs, on-line education, etc.)
• Continuing Concerns over Campus Safety
Situation Analysis
Pre-ACA (2009)
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Funding stagnation for many
college health programs –
increasing fee-for-service charges
2009: Less than 10% of students
covered by high deductible health
plans
Trend for adoption of health
insurance requirements
Dramatic trend for employers to
shift cost to employees
Trend toward compliance ACHA
Ins. Stds. (20% met them), but
many substandard plans remain
Today (2014)
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Medicaid eligibility (where it exists)
and subsidies reduce uninsured
student population
2014: More than 30% of students
covered by high deductible health
plans
Employers can eliminate coverage
for spouses/dependents and have
no mandate to subsidize coverage
for them. Rate unbundling is a
growing trend: Employee +
Spouse/Partner + Each Child
individually
Student plans must meet ACA
requirements
ACA Impact on SHIBPs and CHPs
Student Health Insurance/Benefit Program (SHIBP)
College Health Program (CHP)
•
Individual Mandate
– 2014: $95/adult; $47.50/child (up to $285/family) or 1% of family income
whichever is greater
– 2016: $695/adult; $347.50/child (up to $2085/family) or 2.5% of family
income whichever is greater
– Exemptions: https://www.healthcare.gov/exemptions/
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Ineligible for Medicaid because state did not expand eligibility
Financial Hardship -- or cost greater than 8% of family income
Ministry sharing plan
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Nominal impact on need for SHIBPs following age 26 mandate.
Facilitated trend for employers to adopt high deductible health plans and
reduce/eliminate subsidies for spouses/dependents.
•
100% preventive care mandate increases challenges to traditional health
fee funding for CHPs.
ACA Impact on SHIBPs and CHPs
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Exemption for Student Administrative Health Fees (includes campus
health service support and supplemental “bridge” plans)
Minimum Essential Coverage – Ends debate for cost v. quality
Fully insured plans regulated as individual coverage.
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Exemption from Guaranteed Issue/ Guaranteed Renewability
No exemption from 80% minimum medical loss ratio (precludes risk dividend accounting,
retrospective premium, or other risk sharing)
Age rating probably not permissible
Benefits must be provided + or – 2% of metal actuarial values (bronze, silver, gold , platinum)
No requirement for community rating (e.g., separate rates for undergraduate and graduate
students are allowed)
Self-Funded Student Health Benefit Plans
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HHS Certification required for 2015-16 plan year renewals
Can fully capture surplus funds. Minimum medical loss ratio and rebate requirement does not
apply
Should assume required compliance with state mandates, appeals process, and program
communications
Probably will be able to age rate
States may also regulate
Other federal statutes continue to apply: Title IX, Section 504, Age Discrimination Act, HIPAA,
USIA Regulations for J-1 Visa recipients
ACA Impact – Why Student Plans Have a Cost
Advantage
• No age-based surcharge (same treatment as an employer plan with a
young work force)
• Ability to rate based on student group experience – including credit
for health service and counseling center care
• Gatekeeper for preventive care benefits
• Self-Funding Permissible
 Age rating
 Benefit design flexibility
 Direct contracting with hospitals/physicians/counselors
The Rationale for Student Health Insurance
Reasons Not to Provide
Reasons to Provide
• High Financial Risk in shifting healthcare
environment locally and nationally
• Community health care provider access
• Campus safety – access to psych meds
and community mental health resources
• Student recruitment/retention asset
• Opportunity for community health care
provider partnerships/direct contracting
• Value for SHIBP v. inconvenience of
waiver process
(continuing change at national level in ACA, drift from core
education mission)
• ACA individual mandate is sufficient – no
additional institutional or campus safety
need or responsibility
• ACA individual mandate addresses the
impact on uncompensated care within
local communities
• Highly transitory, non-residential campus
• Urban area, college population is not
highly visible.
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Employer cost shifting
No exchange subsidies for employer-plan eligible
Out-of-state students
International students
ACA Impact – Insurance Choices
Student Classification
Montana Residents – Dependent
on Parents
Insurance Choices
Notation
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Parent’s Insurance
Not eligible for MT Marketplace Subsidies
Trend for employers to adopt high
deductible health plans and discontinue
subsidy of dependent coverage
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Ineligible for Medicaid w/o children
Eligible for MT Marketplace Subsidy at
$11,500 2014 Annual Gross Income for an
individual
•
Insurance exchange includes
surcharge for young adults
•
Bozeman Resident (age 21-24)
$235 for Gold ($1,500 deductible)
$198 for Silver ($3,000 deductible)
$161 for Bronze ($5,000 deductible)
• Eligible for Employer-Sponsored
Coverage
Montana Residents –
Independent of Parents
$168 Student plan ($300 ded.) (Gold)
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Non-Resident Students
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International Students
Graduate Students/Teaching
Assistants/Researchers
•
Most will be ineligible for insurance
marketplace subsidies
Lowest cost exchange options will feature
limited provider networks
•
ACA mandate depends on “non-resident alien
tax status”
ACA compliant coverage required
• Eligible for Insurance Marketplaces
(no subsidies)
• 5 year waiting period for Medicaid
See Above
•
Emergency access only in
Montana
High deductible health plans
ACA Employment Status
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The Future of College Health
Programs
A broad spectrum of strategic options with multiple permutations. . .
Status Quo
Back to Basics
Hope enrollment
growth continues
to fund on-campus
services
Discontinue prefunding of oncampus services
-- lease facilities to
health care
providers
OR
Discontinue oncampus health
services altogether
Continue to make
changes when
there is a clear
path
Transition to
Insurance Billing
Shift funding from
health fees to feeforservice/insurance
Reimbursement
Obtain statutory
change for
secondary
Payor status for
health fees
Advanced SHIBP
Management
• Self-Funding
• Direct
Contracting
• Program
Marketing
Triple Option
Program
Provide three
insurance options
and shift funding of
on-campus
services primarily
to insurance
capitation
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Triple Option
• Comprehensive Program (60% of students)
 Self-funded Benefit Plan
 SHS and Counseling Capitation
• Supplemental Care Plan (Students with high deductible plans) (20%
of students)
 SHS and Counseling Capitation
 Limited Rx, long-term counseling, diagnostic lab/imaging
 Excludes preventive care covered by insurance
• Students with Gold/Platinum Level Coverage (20% of students)
 Students pay office visit/counseling co-pays specified by insurance/Medicaid
 100% coverage for preventive care
Health promotion and public health functions funded through pre-paid fees or institutional allocation
Opportunities
• Move Back to Capitation
• Expand to Provide Services to
Faculty/Staff+Dependents
• Community Partnerships
• Experiment with New Organizational
Structures/Technology
• Elimination of Current Silos
“The pessimist sees difficulty in every
opportunity. The optimist sees the
opportunity in every difficulty.”
--Winston Churchill
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Questions and Discussion
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