OHSU Students Get Bitter Insurance Pill

Source: Portland Tribune

Kim Cathcart doesn’t have a lot of spare change lying around. She’s a third-year pharmacy student at Oregon Health & Science University, so she hopes to be making good money in a few years. But right now she’s amassing huge student debt while living with her husband, a disabled veteran, and their 12-year-old son on about $1,200 a month.

For health insurance, Cathcart has been covered for the last several years through the Oregon Health Plan. She’s been pleased with the Oregon version of Medicaid, which covers her dental care and keeps medication and other out of pocket costs to a minimum.

So you can understand why Cathcart was upset when administrators at OHSU told her in February that despite her OHP insurance she would have to buy into OHSU’s health plan, which will cost her about $4,000 a year for basic coverage, not to mention a $500 annual deductible and 20 percent co-pays.

“This health plan will cost our family thousands we simply cannot afford,” Cathcart says.

Whitney Woolstenhulme is another OHSU pharmacy student facing a similar predicament. Woolstenhulme works 20 hours a week as a pharmacy intern for Kaiser Permanente while studying for her pharmacy doctorate. She’s covered by a Kaiser HMO plan that Kaiser officials call “solid.” Yet OHSU is saying that plan isn’t good enough — Woolstenhulme, like Cathcart, is being told by OHSU she has to buy the school’s health insurance if she wants to stay at OHSU.

“I have to take out student loans to cover the cost or I cannot come back. They won’t allow me to enroll,” Woolstenhulme says.

Woolstenhulme says she knows of at least 10 students in her fourth-year pharmacy class of about 100 who have been told their own health insurance plans aren’t good enough to qualify for a waiver from OHSU. Which means they have to buy OHSU’s health insurance. She suspects that between the school’s medical, dental, nursing and pharmacy students there could be more than 100 facing a situation she calls “super shady.”

Health insurance experts say that OHSU’s policy, basically, is a ripoff. Schools in Oregon can require their students to carry health insurance, but they don’t have the right to insist students pay for the university plan.

On average, they say, university students around the country pay $1,500 to $2,000 a year when they purchase school health plans — about half of what OHSU is demanding. That’s because students represent the lowest risk and highest profitability for insurers — for the most part they’re young and healthy and rarely use health care.

OHSU’s policy is running against the national trend, says Devon Herrick, a health economist with the Dallas, Texas-based National Center for Policy Analysis. Since the Affordable Care Act was implemented last year requiring nearly everyone to have insurance and providing more low-cost coverage options, school health plans have become less necessary, Herrick says. In fact, some schools have decided they no longer need to offer insurance to students.

“It doesn’t make sense to tell a student, ‘No, your insurance is not good enough, even what the state gives you is not good enough.’ How crazy is that?” Herrick says.

OHSU cutting costs

The OHSU policy may be the result of the school’s recent decision to self-insure its students rather than pooling them with others seeking coverage, says Christina Postolowski, a senior policy analyst with Young Invincibles, a Washington, D.C.-based nonprofit promoting health care rights for young adults.

“The school is making a choice to self-insure their students,” Postolowski says. “A lot of schools don’t.”

Nationally, most health insurance plans at small schools such as OHSU pool their students with others needing coverage, Postolowski explains. Some larger organizations such as the California university system self-insure knowing they won’t have a problem getting enough participants in the pool. But self-insuring a small group such as OHSU’s 2,200 students can force an organization to get tough with those who don’t want to join.

OHSU officials refused repeated requests for interviews to explain their policy and address students’ concerns. They did provide the Tribune with a written statement outlining OHSU policy. In that statement OHSU said it did not anticipate a significant change in the number of students who would qualify for waivers.

Yet OHSU also said in the statement that last school year about 60 of its students were allowed to substitute Oregon Health Plan coverage for the OHSU insurance, which will no longer be allowed. OHSU also said in the statement that the move to self-insurance was made to keep costs down.

According to Herrick, universities have historically required only international students to purchase their health insurance. In fact, he says he attended graduate school on his way to a doctorate without any health coverage.

Herrick says school-based insurance plans are making less and less sense in a post-Affordable Care Act world, where the federal government has imposed minimum standards for insurance policies and offered subsidies for health insurance. University plans, designed to provide minimum coverage for enrollees who won’t need much health care, can’t compete with that, Herrick says.

Fewer waivers allowed

Which might explain why OHSU has tightened up its rules so that fewer students can obtain waivers that allows them to find their own health insurance, Herrick says. OHSU has made it difficult to avoid buying into their plan by insisting students be covered anywhere in the country.

“My theory is maybe there’s somebody at OHSU, maybe a department, that’s getting a kickback if they get high enough enrollment,” says pharmacy student Cathcart. “I hope that’s not the case.”

In its written statement, OHSU does not mention a need to corral students in its own health plan. But a memo sent to all students and obtained by the Tribune provides evidence that the university is trying to do just that. In the email OHSU says they’ve tightened the waiver requirements to “create a viable plan for all students. Without broad-based student participation, providing a health plan to a small group of students becomes too costly and therefore unviable.”

Woolstenhulme says she’s tried to talk to OHSU administrators and explain that the OHSU policy might keep her from graduating. She’s in her final year of pharmacy school and says she simply doesn’t have the extra $4,000 for OHSU’s health insurance.

Adam (not his real name) is another OHSU student upset with the OHSU policy. He shares a one-bedroom apartment with a friend, gets about $1,000 a month in financial aid to live on, virtually never goes out to eat, and is being told he must pay more than $4,000 a year for OHSU health insurance. This spring he applied for and was enrolled in the Oregon Health Plan, which provides insurance at virtually no cost to him.

Adam says his four years of pharmacy school will leave him about $200,000 in debt. Four-year students forced to pay OHSU for health insurance will be adding an extra $20,000 to their debt, he says. Some students, he says, could change careers based on that.

“A lot of people coming out with all that extra debt, I think, are going to be pressured to go into retail pharmacy rather than do a residency,” Adam says.

Federal mandates require that Oregon Health Plan coverage be comparable to most private plans, says Sabrina Corlette, an attorney and senior research fellow at Georgetown University’s Health Policy Institute. “Maybe the university wants to hang on to that premium revenue and not lose it. But that is not in the best interest of students,” Corlette says.

“It strikes me as a little bit strange that a university would be passing judgment on the adequacy or lack thereof for policies that have passed muster with state insurance regulators and the federal government,” Corlette says.

Woolstenhulme says she is especially bothered by OHSU’s policy toward its poorest students who have gained coverage through the Oregon Health Plan.

“I’m most upset that Medicaid students have to pay for additional coverage when my tax dollars already fund insurance that covers them completely,” she says.