| University of Minnesota | Health Plan Task Force Report | January 29, 1998 |
| Executive Summary | Background | Issues | Health Care Market | Outlook | Recommendations | Members |
The main questions before the Task Force were these:
The State management, University administration, State employees, and University employees all share the goal of providing high quality health care at a low cost. However, the details of that goal vary considerably among the constituents. The Task Force identified the following issues as apparently of greater concern to University employees than to State employees and management:
Lack of access to University providers has emerged as the largest single health benefit issue for University employees in 1998.
Access to specialists at the University through referrals from a primary care clinic in one of the State options has always been possible, although there are questions about whether these clinic face incentives to refer elsewhere and whether other issues make it unlikely that a patient will receive a referral to the University. More important however, is the lack of access to primary care at the University.
In 1997, two plans offered primary care with University providers: Medica Premier and HealthPartners Classic. Medica Premier is, of course, no longer available in 1998. Although patients seeing University providers under HealthPartners in 1997 could continue these arrangements in 1998, no new patients were accepted. Furthermore, whether University providers will be available under HealthPartners in 1999 is uncertain.
Luckily, Blue Cross added University providers to the State Health Plan for 1998, which made it the only option for those employees using University primary care providers under Medica Premier in 1997. As already described, the enormous increase in the employee contribution to the State Health Plan left many patients with no choice but to leave their University doctors.
Another issue of grave concern to the University is the corresponding loss of revenues to the Academic Health Center created by the loss of these patients. Although it is unwise to contemplate using University health benefit dollars to solve the financial problems of the Academic Health Center, it is ridiculous to deny access to University employees who depend on University physicians for primary care.
In the managed care model that pervades the market in Minnesota, access to physicians is severely restricted except through a primary care clinic. This restriction places a hardship on University employees living outside the State of Minnesota. This group includes faculty on sabbatical or other leaves of absence, early retirees who live outside the State, employees who commute to the University from outside the State, and nonresident dependents of employees.
A partial solution exists through the State Health Plan. After substantial deductibles and copayments, subscribers of this plan can use out-of-network physicians. Furthermore, if an employee is planning an extended leave outside the State, he or she can switch to the State Health Plan for the duration of the leave. However, given the exorbitant cost of the State Health Plan, plus the high out-of-pocket expenses with deductibles and copayments, this solution is out of reach of many employees, particularly the early retirees. Furthermore, the maximum lifetime coverage for out-of-network service in the State Health Plan is $500,000, compared with a figure of $2 million for service within the network. This adds a considerable risk to employees choosing to go this route.
It should be noted that emergency coverage out of network is provided by all the options, so that short trips out of the State for business or vacation are covered. However, carriers vary substantially in their definition of "emergency," and some employees have experienced difficulty getting reimbursed for expenses which do not fall cleanly into the emergency category.
Independent of the question of whether a subscriber is residing outside of the State, there is a serious concern about access to physicians outside of the primary care clinic and its referral network. This is especially important to out-state campuses where the referral network and the choice among available networks are quite limited. Although it is safe to assume that an old-fashioned fee-for-service option with generous benefits is not within the realm of possibility for University employees, it is reasonable for employees to expect some kind of plan where they can escape the managed care network should the need arise.
In 1997, both Medica Premier and the State Health Plan offered some kind of a safety valve. The State Health Plan remains in 1998 as the only available plan with an out-of-network option. As described above, there is a considerable price associated with securing this option, as well as an additional risk associated with a reduced total lifetime coverage.
Some employers offer a "catastrophic" or a "major medical" option, usually an indemnity plan with large deductibles and copayments. Often this option is at a low price to the employee, and is combined with a "cafeteria" benefits program in which employees can move health benefit dollars to other benefits. Other products on the market, such as the HealthPartners Choice Plus plan, offer an out-of-network benefit similar to the State Health Plan, but at a more reasonable price.
Under current State policy, every employee, regardless of whether he or she has access to other health coverage, must choose a health plan through the State. For example, if both husband and wife work for the University, or if one works for the University and the other the State, then it is not possible for one of them to choose family coverage and the other to choose nothing.
This policy imposes a financial burden on the family if both employees wish to be covered by one of the high cost providers. For example, in 1998 if the husband and wife wish the family to be covered by HealthPartners Plan, then the wife could purchase family coverage for $81.91 per month, while the husband could purchase individual coverage for $23.04. If the husband did not work, they could be covered by the one family plan at $81.91, amounting to a marriage penalty of $23.04 per month or $276.48 per year.
Of course, the husband could choose the low-cost option of State Health Plan Select, which would cost him nothing and would avoid the marriage penalty. In this case, however, he could end up in the middle of a dispute between two carriers over which one is responsible for the coverage. This issue is not simply an intellectual exercise of exploring improbable scenarios. A University employee is currently in the middle of cancer therapy and engaged in just such a dispute.
A closely related issue is that of cafeteria benefits. Under such a program, employees are able to move employee benefits dollars between various benefit options. Although fairly common in the business community, such a program is not available to University employees. The program is usually associated with the availability of a catastrophic option as described above or the option for an employee who is covered by another health plan to choose no coverage from his or her employer.
For example, if the University had a cafeteria benefits program, then, in the situation just described, the husband could not only choose to be covered by his wife's family policy, but he could decline health insurance altogether and move the University health contribution of $162 per month to a different benefit.
Another example arose in the Fall, when some employees asked whether they could forgo some of their accumulated vacation time and transfer the funds to help pay their increased health plan costs. The requests were declined, since the University has no mechanism for such a transfer. The adoption of a cafeteria benefits program would make such a transfer part of the normal open enrollment options.
Currently, all the health plan options available to University employees provide coverage for mental health and chemical dependency only through highly restricted networks, typically only one or two clinics per county. The concern about restricted mental health coverage has been a significant issue among University employees for more than a decade, and the issue has gone largely unresolved.
Under the current program, the University makes no financial contribution to the health care of retirees. Retirees who are age 65 or greater can purchase out of their own pockets a "medigap" policy at a group rate through the State. This policy provides coverage for the difference between actual health care costs and the costs covered by Medicare. Retirees who are below the age of 65 are eligible to purchase one of the plans available to unretired employees but at the full cost.
In both cases, the expense is considerable, placing a burden on the finances of retirees. For retirees of age 65 or greater, the cost of a single medigap plan is $185 per month. For a husband and wife, the cost is $370 per month, or $4440 per year. For a retiree below age 65 choosing the State Health Plan family coverage, the cost is $595 per month, or $7140 per year.
As discussed above, pre-65 retirees have the additional problem of dealing with out-of-network coverage if they move out of the state.
University policy forbids discrimination on the basis of sexual orientation, which means that the University must provide the same employee benefits for domestic partners as are provided for married employees. However, the State health benefits program makes no provision for domestic partners. Currently, the University meets its obligation to domestic partners by providing a cash benefit equal to the contribution to family plan for married employees.
This situation is far from an equitable solution, since it leaves the domestic partner paying an individual rate instead of a group rate, which is especially significant in cases where prior health problems exist.
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