October 29, 2009 — In response to rising health care costs, the University of Virginia's self-funded health plan has developed a two-part strategy to maintain the plan's stability – revising the benefits to include additional cost-sharing and increasing premiums for the high-premium plan.
The low-premium plan's premiums will remain the same.
"Our health plan provides us health care, not health insurance," said Susan A. Carkeek, vice president and chief human resource officer. "This is an important distinction to make in years when costs or usage rise."
In 2009, the health plan has experienced both increased costs and increased use.
"Employer and employee premiums are set at an amount necessary to cover actual medical costs," Carkeek explained. "We are fortunate to be able to hold premiums in the low-premium plan steady – a great choice for healthy employees and families. The low-premium plan is worth a second look in a year when we've had to raise premiums on the high-premium plan and there are no raises. For example, an employee plus child could save nearly $1,500 a year by switching."
The high-premium plan requires higher monthly premium contributions but has less cost sharing (co-pays, co-insurance, or deductibles) at the point of service than the low premium-plan.
Medical costs paid by the plan increased 15 percent in 2008 over 2007. Approximately $3 million more was paid for claims exceeding $100,000 in 2008 than was paid in 2007.
Here's a comparison of the monthly premiums for both plans, for 2009 and 2010, plus the amount the University will contribute in 2010:
|Employee||2009 Low Premium||2010 Low Premium (no change)||2009 High Premium||2010 High Premium||2010 Employer Contribution|
|Employee + Child||$47||$47||$147||$166||$676|
|Employee + Spouse||$54||$54||$171||$193||$678|
|Double State Married Employees||$80||$80||$291||$334||$1028|
In 2009, new benefits were added, including coverage for acupuncture, pain management and dental implants and for wellness programs, including Weight Watchers and smoking cessation.
"The U.Va. Health Plan aims to provide a health care benefit that is attractive to current and prospective employees while maintaining financial stability," Carkeek said.
Changes include the following:
For both plans: Office visit co-pays will be $20 for primary care (up from $15) and $40 for specialists (up from $30).
For both plans: Brand-name prescription drugs will change from co-pay to co-insurance (cost-sharing). This means instead of paying a flat co-pay, employees will pay a percentage of the drug's cost, with caps. This includes a new $100 annual deductible for brand-name drugs purchased at a retail pharmacy. Generic drugs remain the same at $6.
New deductibles for the high-premium plan: $100 for all diagnostic, lab and x-ray services, which are now covered at 90 percent with a 10 percent co-insurance fee. In addition, some specialty services that are now covered at 100 percent (cardiac rehabilitation and respiratory therapy, for example) will be subject to the $100 deductible and a 10 percent co-insurance. There is a maximum out-of-pocket for co-insurance of $2,500 per individual per calendar year, on the high-premium plan. Preventive services remain covered at 100 percent with no deductible under both plans.
The in-patient hospital co-pay for the high-premium plan will increase to $300 (up from $200), and emergency room and outpatient visits will be $125, up from $75.
In 2008, the plan enrolled 13,266 employees, with an average total enrollment of 27,858 when dependents are included. Average enrollment in the low-premium program increased by 22 percent in 2008 over 2007, while the average increase in high-premium program enrollment was less than 1 percent. The high-premium plan accounts for 91.5 percent of the enrollment, or 12,141 employees. Total cost for the plan is projected to be $137 million in 2010.
Open enrollment will be Nov. 2 through 20, with employee resource fairs scheduled for Nov. 12 at Newcomb Hall and Nov. 16 in the Health System. Sessions during the fair will provide additional details on benefit offerings. University Human Resources benefits counselors are also visiting the various employee councils during October and November to provide information on the plan changes.