Impact of the ACA on College Health Programs CCHA March 17, 2014

1. Impact of the ACA on College Health ProgramsCCHA March 17, 2014 Jim Mitchell, MBA, FACHA Director, Student Health Service Montana State University

3. ACA: The Big Picture • Policy goals: Drastically reduce the number of uninsured and improve quality of insurance coverage • The new landscape of health insurance in 2014 • Mandate for most individuals to purchase health insurance if not covered elsewhere • Mandates for many employers to offer health insurance have been delayed until 2015 (employers with 100+ employees) and 2016 (employers with 50-99 employees) • Insurance marketplaces allow individuals and small businesses to purchase coverage (small business marketplace delayed in many states) • Subsidies for low income people with Medicaid expanded in 26 states(incl DC); 19 states not expanding; 6 states are still debating the issue • Barriers to coverage (pre-existing condition exclusions, lifetime limits, medical underwriting) are removed

4. Provisions of ACA Implemented Earlier • Extend coverage of young adults on employer plans to age 26 • Preventive care covered with no patient cost sharing • 80% medical loss ratios for individual plans • Ramping up of requirements for student insurance plans; must meet all ACA requirements in 2014

5. ACA Addresses Quality Issues in Student Plans • Report by NY State Attorney General (2010) • Many plans provide dangerously insufficient coverage • Many plans return a low percentage of premium in form of benefits • Brokers, agents, consultants are often paid exceedingly high commissions • Contributions paid by brokers, etc. to colleges and/or their employees leads to a conflict of interest • There are often non-standard exclusions (e.g. alcohol related injuries; attempted suicide)

6. Higher Ed Environmental Pressures • Rising Cost/Increasing Student Debt • Cost Centers Will Be Critically Reviewed • Activities Will Need to Justify Themselves on Basis of Importance to Educational Mission • Non-essential Services Will Be Eliminated • Outsource Where Possible • Retention and Graduation Rates (particularly in public sector) • Debate about Mission of Higher Education and Learning Outcomes • Disruptive Innovation (MOOCs, on-line education, etc.) • Continuing Concerns over Campus Safety

7. Situation Analysis Pre-ACA (2009) Today (2014) Medicaid eligibility (where it exists) and subsidies reduce uninsured student population 2014: More than 30% of students covered by high deductible health plans Employers can eliminate coverage for spouses/dependents and have no mandate to subsidize coverage for them. Rate unbundling is a growing trend: Employee + Spouse/Partner + Each Child individually Student plans must meet ACA requirements • Funding stagnation for many college health programs – increasing fee-for-service charges • 2009: Less than 10% of students covered by high deductible health plans • Trend for adoption of health insurance requirements • Dramatic trend for employers to shift cost to employees • Trend toward compliance ACHA Ins. Stds. (20% met them), but many substandard plans remain

8. ACA Impact on SHIBPs and CHPsStudent Health Insurance/Benefit Program (SHIBP)College Health Program (CHP) • Individual Mandate • 2014: $95/adult; $47.50/child (up to $285/family) or 1% of family income whichever is greater • 2016: $695/adult; $347.50/child (up to $2085/family) or 2.5% of family income whichever is greater • Exemptions: https://www.healthcare.gov/exemptions/ • Ineligible for Medicaid because state did not expand eligibility • Financial Hardship -- or cost greater than 8% of family income • Ministry sharing plan • Nominal impact on need for SHIBPs following age 26 mandate. • Facilitated trend for employers to adopt high deductible health plans and reduce/eliminate subsidies for spouses/dependents. • 100% preventive care mandate increases challenges to traditional health fee funding for CHPs.

9. ACA Impact on SHIBPs and CHPs • Exemption for Student Administrative Health Fees (includes campus health service support and supplemental “bridge” plans) • Minimum Essential Coverage – Ends debate for cost v. quality • Fully insured plans regulated as individual coverage. • Exemption from Guaranteed Issue/ Guaranteed Renewability • No exemption from 80% minimum medical loss ratio (precludes risk dividend accounting, retrospective premium, or other risk sharing) • Age rating probably not permissible • Benefits must be provided + or – 2% of metal actuarial values (bronze, silver, gold , platinum) • No requirement for community rating (e.g., separate rates for undergraduate and graduate students are allowed) • Self-Funded Student Health Benefit Plans • HHS Certification required for 2015-16 plan year renewals • Can fully capture surplus funds. Minimum medical loss ratio and rebate requirement does not apply • Should assume required compliance with state mandates, appeals process, and program communications • Probably will be able to age rate • States may also regulate • Other federal statutes continue to apply: Title IX, Section 504, Age Discrimination Act, HIPAA, USIA Regulations for J-1 Visa recipients

10. ACA Impact – Why Student Plans Have a Cost Advantage • No age-based surcharge (same treatment as an employer plan with a young work force) • Ability to rate based on student group experience – including credit for health service and counseling center care • Gatekeeper for preventive care benefits • Self-Funding Permissible • Age rating • Benefit design flexibility • Direct contracting with hospitals/physicians/counselors

11. The Rationale for Student Health Insurance Reasons Not to Provide Reasons to Provide Community health care provider access Campus safety – access to psych meds and community mental health resources Student recruitment/retention asset Opportunity for community health care provider partnerships/direct contracting Value for SHIBP v. inconvenience of waiver process Employer cost shifting No exchange subsidies for employer-plan eligible Out-of-state students International students • High Financial Risk in shifting healthcare environment locally and nationally (continuing change at national level in ACA, drift from core education mission) • ACA individual mandate is sufficient – no additional institutional or campus safety need or responsibility • ACA individual mandate addresses the impact on uncompensated care within local communities • Highly transitory, non-residential campus • Urban area, college population is not highly visible.

12. ACA Impact – Insurance Choices

13. The Future of College Health Programs A broad spectrum of strategic options with multiple permutations. . .

14. Triple Option • Comprehensive Program (60% of students) • Self-funded Benefit Plan • SHS and Counseling Capitation • Supplemental Care Plan (Students with high deductible plans)(20% of students) • SHS and Counseling Capitation • Limited Rx, long-term counseling, diagnostic lab/imaging • Excludes preventive care covered by insurance • Students with Gold/Platinum Level Coverage (20% of students) • Students pay office visit/counseling co-pays specified by insurance/Medicaid • 100% coverage for preventive care Health promotion and public health functions funded through pre-paid fees or institutional allocation

15. Opportunities • Move Back to Capitation • Expand to Provide Services to Faculty/Staff+Dependents • Community Partnerships • Experiment with New Organizational Structures/Technology • Elimination of Current Silos

16. “The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.” --Winston Churchill

17. Questions and Discussion