UC Care is the only low-cost option for out-of-state medical care for UC employees and their families. According to the UC Faculty Welfare Health Subcommittee, it is in a downward spiral: rising costs and premiums have driven some employees away in favor of free or low-cost HMOs; enrollee exodus further drives up UC Care plan premiums. The urgency of the situation is compounded by the planned departure of Prudential from the health care business. UC is initiating a process that will lead to a competitive bid for the majority of the University-sponsored health plans to be effective January 1, 2000. The coverage currently provided under UC Care, Core, Prudential High Option, Health Net, and PacifiCare plans will be included in this bid. To give your input, access the Benefits Web Page www.ucop.edu/bencom through the end of August.
The DFA has historically considered health care a central mission and CUCFA has requested a consultation session on UC Care with the UCOP. Employees need to know about the economics of risk adjustment and why there might be value in paying a bit more for a health plan that offers freedom of choice now so that options are available in the future. For a full discussion of this issue, see the CUCFA Web page home.pacbell.net/ucfa which contains an article summarized below:
SUMMARY: Over 90% of the Pru-High enrollees over the last 5 years have left that plan and gone to UC Care. Between 1995 and 1998, UC Care premiums increased by approximately 10% more than a weighted average of HMO premiums offered at the University. The 1998 employee contribution rate of $16.82 , $33.83, and $47.08 (for 1 party, 2 party, and families, respectively) for UC Care was roughly twice as high as in 1997 and may increase dramatically in 1999. The HMOs at UC in 1998 are less costly: Kaiser, PacifiCare , and WHA are free; and Health Net is $1.60, $3.50, $5.07. When Health Net premiums rose in 1996 from zero for families to $20, Health Net lost 20% of its members to free programs and therefore reduced its premiums in order to regain membership. If UC Care increases premiums to accommodate some of the increased risk from Pru-High enrollees switching to UC Care, more healthy employees may leave UC Care.
If UC employees had only HMO choices available, possible consequences might be: 1. inability to receive treatment away from home (on sabbatical and out-of-area coverage for children at college); 2. lack of provider choice; 3. reduced access to specialists; 4. inability to choose a plan relying on fee-for-service reimbursement; 5. access problems for persons with chronic diseases.
Faculty Welfare is investigating risk adjustment strategies to control rising costs and still preserve a choice among providers. Among the strategies being considered are (1) UC would determine an average payment to health-care providers based on overall age of those insured. Employer contributions would remain constant but employee contributions would vary based on age (less for those younger and in better health, more for those older and presumably more in need of health care). (2) Institute graduated employee payments for those who are older. (3) Raise the deductible and/or copayments for POS (point of service) care, especially for services beyond primary care.
Perhaps no single adjustment will save UC Care, but almost everyone who has looked at the matter agrees that if nothing is done, it is not a question of if but when UC Care will self-destruct.