UNIVERSITY PARK, Pa. — Penn State officials spoke with an overflow gathering of graduate students Thursday (March 28) in the Katz Building Auditorium about ways the University is working to mitigate the rising projected cost of graduate student medical insurance.
The rise in costs, outlined below, stems from increased student use and factors directly and indirectly related to the implementation of the federal Affordable Care Act (ACA).
While the University is not in control of the insurance plan changes, Regina Vasilatos-Younken, interim dean of The Graduate School, said the administration is working with the Graduate Student Association (GSA) and other members of the graduate student community to mitigate the impact of those changes where possible.
To offset the increase in premium costs, Penn State will increase the University's premium contribution from 70 percent to 75 percent for plans that cover the graduate assistant, fellow or trainee and his or her spouse/domestic partner or children. The University's contribution for family coverage will increase from 70 percent to 76 percent. The individual plan contribution will be maintained at 80 percent. This is expected to keep the net increases to insurance premiums for all graduate assistants for 2014-15 at $30 or less per month over the next 10 months.
"The other commitment in terms of trying to mitigate the impact that this will have is to increase stipends by 3 percent across every grade level," Vasilatos-Younken said. Although the University's budget cannot be finalized until the appropriation amount is determined by the state later this summer, this stipend increase is a priority item in the budget.
"Penn State's commitment in this, and it is immediate and it is continuing and it is for the future, is to ensure that we can provide affordable and quality care coverage for our students. We work very hard to recruit the best graduate students, and you're all sitting here," Vasilatos-Younken said. "The last thing we're going to do is invest to bring you here and not let you complete a degree because of something like student insurance."
While these steps will moderate premium increases for graduate assistants, other cost issues remain, so a task force will be established to explore further solutions to the challenges created by the ACA. The task force, which will include representation from relevant University administrative offices, The Graduate School, students from GSA (the Graduate Student Association), UPUA (the University Park Undergraduate Association) and CCSG (Council of Commonwealth Student Governments), will be charged to bring forward its recommendations by July 1. The task force, will explore topics including:
-- Health Reimbursement Accounts to help with out-of-pocket expenses.
-- Indexed premium structure to assist those at the lowest stipend grades.
-- Increase support to expand Counseling and Psychological Services (CAPS) at University Park to reduce the need for off-campus care.
-- Partnerships with other peer institutions in organizations such as the Committee on Institutional Cooperation (CIC) to negotiate future contracts with insurers that benefit from a larger pool of students on one plan.
Penn State has a multi-year contract with Aetna Student Health that precludes the University from looking to other companies for different student policy plans and solutions.
The 2014-15 plan design provides more comprehensive coverage than what was provided before the passage of the Affordable Care Act. However, the cumulative effect of all of the ACA requirements was to escalate the cost of coverage. In particular, the plan details presented by Aetna for 2014-15 include:
-- a 30 percent increase in premiums;
-- a $250 individual deductible (up from $75) and $500 family annual deductible (increased from $225);
-- 90 percent coverage in-network up to an in-network, out-of-pocket maximum of $1,350 per individual and $2,700 for family coverage; and
-- an emergency room co-pay of $150 (waived if the individual is admitted to the hospital).
Prescriptions, which are covered 100 percent at University Health Services (UHS) or 50 percent outside of UHS, are not projected to change from the current plan.
Students speaking at the meeting told their individual stories to drive home their concerns. In general, speakers spoke positively about the current insurance coverage, with many saying they have been happy with the insurance as it stands currently. However, all were concerned about the changes leading to increased costs that they feel they and others cannot afford.
"I can assure you that these issues are not lost on us. We don't have all the answers yet, but we're here because the concerns of the graduate and professional student communities are important to us, because you are important to us," said Nick Jones, executive vice president and provost.
Some speakers expressed frustration that they are just hearing about these changes.
"I don't want the impression to be left that somehow we've known these numbers for a long time and were hiding them from you and your faculty advisers," said Jones. The provost said the administration learned of these numbers less than two weeks ago, and began working immediately on ways to "blunt the impact that we knew this was going to have on this population."
Jones assured those in attendance that the steps announced at the meeting signaled the starting point. "We've taken some steps. We know that there's more we need to do, and we're working on that," he said.