University of Oregon considers creating UOCare, its own self-insured student health plan

May 24--The University of Oregon is proposing to create its own health insurance plans -- UOCare -- and to sweep all new and returning students into one of the plans come fall.

The plan would include the existing on-campus health care plus a yet-to-be-identified network of off-campus doctors, counselors, urgent care and hospital services.

UOCare would satisfy the requirement in the federal Affordable Care Act that students carry health insurance.

The federal penalty for individuals who neglect to buy coverage is getting steep: $325 this year and $695 for 2016.

The UO Board of Trustees first would have to give the UO permission at its June 4-5 meeting to pursue the student health plans. The plan would be self-insured, which would mean the university would take on the financial risk of providing coverage for the students.

"If we don't provide something for students, they will have to navigate the state exchange themselves," said Robin Holmes, vice president for student life. "They also most likely will pay a higher cost on that exchange because they will be lumped in with older Oregonians."

The UO's move would put it in direct competition with health insurance companies that offer policies to the public.

On the state exchange, students in Lane County can pick among 39 plans offered by about a dozen insurance companies.

So far, details of the UO plans -- including overall cost -- are sketchy. UO officials introduced the concept in broad strokes at a recent Board of Trustees meeting.

UOCare might be a godsend for some students. It might be an overly expensive option for others. That would depend on the details emerging from the UO and on the students' individual situations.

The UO would need to contract a number Eugene-Springfield medical providers to complete its plans. One would be a hospital, such as the Sacred Heart Medical Centers or McKenzie-Willamette Medical Center. Another would be a doctor group, such as PeaceHealth Medical Group or Oregon Medical Group. The UO has identified one business partner: Springfield-based health insurer PacificSource, which would help students figure out where and how to sign up for insurance.

"There's been a lot of negotiations with folks out in the community to figure out what the model would look like and what it would potentially cost," Holmes said.

Historically, most UO students have received primary care at the 120-employee student health center, which provides general health care, pharmacy and dental services, x-rays, physical and sports therapy, nutrition counseling, and immunizations. In addition, students also bought catastrophic plans offered by an insurer in conjunction with the UO -- or they went uninsured. Some parents bought insurance for their children.

But after 2010, when the ACA allowed students to stay on their parents' health plan until age 26, students left the catastrophic coverage in droves, making it no longer viable.

If the UO creates UOCare, students this fall will be automatically enrolled in its supplemental coverage, Holmes said.

Then, students will have to decide whether to be in one of the UO's plans and pay premiums to the university -- or seek an outside option, such as buying a policy on the federal exchange or remaining on a parent's insurance.

The question: "Is this (UO) student health plan actually going to be a better deal for them than a plan they could get elsewhere?" said Jesse O'Brien, health care advocate at the Oregon-based OSPIRG nonprofit consumer group.

The answer: It depends.

The UO Care Supplemental plan would bill students' primary insurance for services rendered at the student health or counseling center. "Financially, that would work better for the health center, and also that would work better for students and parents," Holmes said.

Students would have three choices: stay in the supplemental plan for $525 per year, opt to also buy the UOCare Comprehensive insurance for $2,070 per year, or opt out of both the UO plans.

To opt out, students would have to prove that they are covered by platinum-level, top quality health plans. Those covered by their parents' comprehensive insurance, those getting subsidies to buy platinum-level insurance on the state exchange, those in the UO Graduate Teaching Fellows Federation health plan, or those in the Oregon Health Plan -- the state's version of Medicaid -- would most likely opt out.

Even then, the students who opt out would still have to pay the UO's proposed $330 per-year student health fee, which goes to fund the student health center.

Affordable Care Act plans come in four levels, platinum, gold, silver and bronze. Platinum-level plans have the lowest out-of-pocket costs but the highest monthly premiums, the Oregon Insurance Division says.

Of 320,359 individuals in Oregon who enrolled in ACA plans through February, two-thirds chose a lesser, silver plan because of the lower premiums. Less than 2 percent chose platinum.

UOCare Comprehensive, a platinum plan, would cost at least $25 less per month than comparable plans on the federal exchange, Holmes said, and it would offer services students would be unlikely to find elsewhere, such as sports therapy, and group therapy centered on eating disorders.

On the downside, student health plans created by a university and self-insured -- meaning the university itself takes on the financial risk for plan success -- do not fall under the same federal rules as other health insurance plans, and so they may not provide the same consumer protections.

Most U.S. universities partner with health insurance companies that provide the actual coverage to the students; only 30 or so universities have launched self-insured plans as the UO is proposing to do.

Self-insured schools include Harvard, Princeton and Yale, and University of California schools.

"When you're offering a self-funded plan, it gets a little weird," said Jake Sunderland, spokesman at the Oregon Insurance Division.

Self-funded plans are exempt from the state's annual rate review process, in which insurance companies submit the rationale for their proposed annual premium increases, and the state holds public hearings and analyzes the rate requests.

Initially, as the Affordable Care Act was under development, the federal Health and Human Services Department said it had no authority to regulate self-funded student health insurance plans.

That meant that consumer protections -- such as barring annual or lifetime coverage caps -- didn't apply.

Since then, HHS has required that self-insured student health plans apply for federal certification that they provide a floor of benefits, called "minimum essential coverage."

In theory, the certification will require that a university plan is "roughly equivalent" to an Affordable Care Act plan, O'Brien said.

"In practice, there's some wiggle room. It could look a little different, definitely," he said.

Federal regulators are supposed to require self-funded university plans to cover "substantially all" minimum coverage, said Jen Mishory, a lawyer and executive director of Young Invincibles, a Washington, D.C., advocacy group for young people. "I'm hopeful it will raise the standards for these self-funded plans," she said, "but we'll see what comes."

Follow Diane on Twitter @diane_dietz . Email [email protected] .

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