Increased Premiums, Stricter Waiver Criteria For Student Health Insurance In 2016-17

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by Morteza Karimzadeh, Alison Franklin, Enica CastaƱeda

Increased Premiums and Stricter Waiver Criteria in 2016-17

At the April 18, 2016 meeting of the Student Insurance Advisory Board (SIAB), the Student Health Insurance office of Penn State (with Student Affairs) announced the new individual premium rate of $3,296 for the Penn State-Aetna Student Health Insurance Plan (SHIP) for the 2016-17 year. This premium is an 8 percent increase from the current rate of $3,054 from 2015-16. Aetna cited the plan utilization rate for 2014-15 (78 percent), implementation of additional ACA taxes/fees, and market trends for this increase. This 8 percent increase in premiums follows a round of negotiations between the University and Aetna, who had initially presented a 10.5 percent increase.

The only major update of the SHIP plan design for next year is the discontinuation of the current Continuation Plan (gap coverage) that allowed individuals to purchase the SHIP for an additional month after leaving the university. Gap coverage is no longer deemed necessary and adds unforeseen financial risk to the plan, as evidenced by high utilization of gap coverage in 2014-15 by a total of 10 individuals who used it. Now, after leaving the university, individuals can purchase insurance through the ACA Marketplace special enrollment process.

International students, however, will see a major change regarding proof of adequate insurance.

International students are required to provide proof of adequate insurance according to current waiver criteria (found here). Enrollment of international students in the SHIP decreased by 39 percent during 2015-16, which resulted in a smaller SHIP pool, higher premiums, and unsatisfactory experience for international students using other insurance providers that had designed plans to meet current waiver standards but were not comprehensive in other aspects. Penn State has instituted new strict criteria (found here) in order to assure quality healthcare for international students as well as encourage them to enroll in SHIP to keep the pool size large and premium costs low.

Hard Waiver for all, and Mandatory Insurance for International Students in Fall of 2017

Penn State is already looking to 2017-18 with a plan to implement an insurance hard-waiver process (proof of adequate insurance) for all (domestic and international) full-time students, as recommended by the Student Health Insurance Task Force in October of 2014. The university is still in the process of defining the credit hours for being considered a full-time student subject to the Universal Health Insurance requirement.

Penn State also plans to make the Penn State SHIP mandatory for international students in 2017-18 — unless the student has a U.S. employer plan or International Sponsor providing the student with a plan that has better coverage than the Penn State SHIP — along with a letter of financial guarantee for any medical charges not covered by the plan. Therefore, international students who are not covered under an employer plan or sponsored by their home governments will have to purchase Penn State SHIP.

These two major changes are designed to ensure high quality healthcare for students, keep the SHIP pool size large, and keep costs down. Aetna estimates an approximate 20 percent decrease in premium costs if the two changes (hard waiver for all full-time students and mandatory SHIP for international students) are implemented.

Finally, the university is going to put the SHIP out to bid for the 2017-18 academic year and will be asking for insurance providers to place bids during the 2016-17 academic year with the hope that the rates of the SHIP would decrease while keeping similar benefits. The Penn State Student Health Insurance office, SIAB, and student organizations will be involved in that process.

Students can direct their comments, questions, and/or concerns about health insurance to the Graduate and Professional Student Association liaisons to SIAB: Alison Franklin (amy125@psu.edu), Morteza Karimzedah (karimzadeh@psu.edu), and Enica CastaƱeda.

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