U. may give students choice of health plans

Two plans may be offered next year to students who buy insurance from Penn. Last year, students buying health insurance through the University had to purchase coverage from Mega Life and Health Insurance Co. This year, they were covered by Aetna U.S. Healthcare. Next year, they may have a choice between the two. Spurred by recommendations from the newly created Provost's Student Health Insurance Advisory Board, University Health System administrators are currently negotiating with Mega Life -- the fee-for-service insurance provider dropped last summer by the University -- to offer students an alternative to Aetna U.S. Healthcare, the country's largest operator of managed-care plans. The University replaced Mega Life -- now renamed the Educational Finance Group -- in order to provide students with less expensive Aetna U.S. Healthcare coverage. But students on the board wanted the option to buy Mega Life's form of coverage, a choice Student Health officials said they will offer next year. "We pretty much made a decision to do that," said Marjeanne Collins, director of Student Health Services. "This is what the students want." About 6,000 undergraduate and graduate students purchase insurance through the University. In years past, Penn has offered only one type of insurance -- either Mega Life or Aetna U.S. Healthcare -- but the differences between the two plans are significant. Aetna U.S. Healthcare pays the University Health System a lump sum of $144 per student out of the insured students' premiums. Student Health Services received $170,000 in payments last year, while nearly $650,000 was paid to other campus health care providers, including the office of Counseling and Psychological Services. These lump-sum payments -- known as capitation fees -- replaced the indemnity system used by Mega Life, whereby payments were made to Student Health for each service rendered. All students already pay money to Student Health through the General Fee to allow them access to basic services. About 8.35 percent of the $28 million General Fee -- or $2.34 million -- goes to Student Health. Members of the Graduate and Professional Student Assembly were displeased with Aetna U.S. Healthcare's method of reimbursing Student Health, claiming that payment of the capitation fee and the General Fee constituted "double billing." GAPSA Chairperson and Engineering graduate student Sanjay Udani explained that there was a misunderstanding regarding how Student Health was compensated. In response to the capitation fee charged by Aetna U.S. Healthcare, GAPSA opened negotiations last semester to become a policyholder with Mega Life -- then without any relationship with the University -- to provide coverage to however many of the more than 10,000 graduate students wished to buy into the plan. But Janice Madden, the vice provost for graduate education and chairperson of the Student Health Insurance Advisory Board, thinks that GAPSA was getting in over its head. "It would have been a tremendous effort for people who are full-time students to also run an insurance program," she said. "This is a major administrative burden." Student Health spends $200,000 a year to manage its financial dealings with its health insurance provider, she added. But Udani stressed that he finds it "kind of amusing that they think we can't handle it," adding that "I guess we won't find out." And even with the new choice of plans, many graduate student leaders say they remain suspicious. "I find it kind of interesting that only after GAPSA is talking to Mega Life does the University talk to them," Udani said, adding that he would not be surprised if "hidden fees" showed up in the University-negotiated plan. But Collins defended the University's actions. "There is no plot involved, there's no hidden agenda," she said. "This is about health care." Collins said she expects that both plans will allow students to go outside the University Health System if they pay 20 percent of all costs over a $250 deductible. She added that the Mega Life plan would likely be more expensive, but would provide a wider range of psychiatric benefits. The final bids from Mega Life and Aetna U.S. Healthcare are due later this month. After the bids are received, a decision on the insurance will be made next month, and letters explaining the options will be sent to current and prospective students.

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