State legislature may require UC to remove student health insurance benefit caps

The state legislature may soon require the University of California to remove benefit caps currently in place under the UC Student Health Insurance Plan.

A recently introduced state assembly bill, AB 314, would make self-funded student health insurance plans like UC SHIP subject to the guidelines laid out in President Barack Obama’s Affordable Care Act.

The Affordable Care Act currently does not apply to UC SHIP, because of the plan’s status as a self-funded student health insurance plan.

AB 314 would, however, mandate compliance with the federal act, which includes the removal of benefit caps, said Assemblyman Richard Pan, who introduced the bill, in a conference call with members of the media.

UC SHIP currently sets both lifetime benefit and annual prescription medicine caps, which vary by campus. At UCLA, the lifetime benefit cap is set at $600,000.

Pan said during the conference call that the bill closes a loophole allowing self-funded student health plans to be exempt from the guidelines on benefit caps.

“We want to make sure students are ensured the same protection as other Californians and Americans,” he said.

Brooke Converse, a UC spokeswoman, said the UC is still reviewing the potential consequences of the bill.

Converse said the UC will likely make a decision on whether to remove the caps before the bill gets through the legislature.

The UC SHIP Advisory Board, which consists of students and administrators from the 10 campuses, voted last month to remove the coverage caps, Converse said. Converse said the UC SHIP Advisory Board has passed the recommendation to the Executive Steering Committee, of the UC Office of the President. The committee is likely to pass this same recommendation to the UC Council of Chancellors, which has the final say on the insurance policy, she added.

There has been controversy surrounding the caps in recent months, with both the UC Student-Workers Union Local 2865 and the UCLA Graduate Students Association actively advocating for the removal of the caps.

Scott Arno, a graduate student in the neuroscience department and a member of the UC SHIP Advisory Board, said while the provision removing the caps is still only a recommendation, he feels it is likely that the caps will be removed for next year with around a 3 percent rise in premiums.

Pan said he thinks the UC’s efforts to remove the caps on its own is encouraging, but he believes a legislative effort is needed to make sure the caps are not reinstated in the future.

Arno added that he thinks there needs to be differentiation between the caps, some of which are useful for keeping valuable health services.

For example, he said the uncapping of dependent care plans could lead to the removal of the plan entirely because of excessive cost.

The dependent care plan provides coverage to dependents of students who are themselves covered under UC SHIP. The plan is currently almost subsidized by students, whose premiums partly go toward paying for the plan, he said.

“The dependent plans are capped very aggressively and the reason is because they’re very expensive and the people that buy into that plan are the people who really, really need it,” Arno said. “And that means (people on the plan) making a lot of claims and it’s very expensive to insure these people.”

He said even though the proposal to remove caps on dependent plans seems like a good idea, it would also make costs prohibitively high.

Omer Hit, a first-year neuroscience student, said he thinks the premium rate rise that may come from removing the caps would hurt the plan’s ability to help students.

“I am in favor of a bill that removes the caps but only if it doesn’t raise premiums up too much,” he said.

The bill is currently going through review in the state assembly and will be heard in the Assembly Appropriations Committee on April 10, according to a statement from Pan’s office.

Email Truong at [email protected].