After receiving basic health insurance while working for a small consulting company, Kevin J. Reuning, a would-be graduate student, was pleased to learn about Pennsylvania State University’s generous plan. During a recruitment event, a Penn State doctoral student told him that her out-of-pocket costs for having a baby had been $75 total. But now, two years after starting his Ph.D. program in political science, his deductible has more than tripled, to $250, premiums have increased, and coverage has been reduced.
Mr. Reuning is one of a growing number of graduate students angered by recent reductions in their health insurance brought on by the Affordable Care Act — changes that have exacerbated already tense relations between Ph.D. students and universities over working conditions.
The effects of the act, which was signed into law by President Obama in 2010, are now being felt on campuses as colleges deal with a host of regulations that govern student health-insurance plans. Such plans insure up to three million people, many of them graduate students who receive insurance or subsidies to help pay for it, along with stipends and tuition waivers in exchange for teaching undergraduate courses or assisting with faculty research projects. In cases like Penn State’s, the law has led to a downgrade in benefits, while other campuses have cut dependent coverage or stopped subsidies in efforts to comply with the law.
Graduate students rarely blame the law for any problems but rather the choices of administrators. Colleges are making hasty decisions about how to comply with the Affordable Care Act, the students argue, and have failed to explain cost increases and other changes. Frustration about the health-care changes is helping to spur union organizing on several campuses.
“The long-term effect of all this is there might be a few more unionized graduate schools,” says Mr. Reuning, who is helping to form a graduate-student union at Penn State. “About half of us became involved with this because of the health-care issue.”
‘Our students were very upset. They just didn’t believe this could happen to them and that the Affordable Care Act actually said this.’
Despite the concerns of graduate students, the law has led to improvements in student health care on most campuses, say college administrators and health-care consultants. It has bolstered coverage, guaranteed protections, and forced many colleges to improve their plans to meet new standards. Stephen L. Beckley, a health-care consultant specializing in higher education, estimates that before Obamacare, as the law is known, 60 percent of student health-insurance plans were “junk plans” that weren’t serving students well.
Yet administrators also express confusion about exactly what the law means for student insurance plans and for graduate assistants. The issue goes back to when the law was drafted, says Jim Mitchell, director of the Student Health Service at Montana State University, who was one of a handful of college health experts who met with Senate Finance Committee staff members in 2009 to explain the value of student health-insurance plans. It was decided that the plans would be treated as individual coverage, as opposed to group coverage, a distinction that underlies some of the confusion on campuses and one that colleges continue to try to clarify with the government.
“The federal bureaucrats are trying to be very careful in how they respond to make sure there aren’t further unintended consequences of making the wrong move,” Mr. Mitchell says. “But that makes it obviously frustrating for universities trying to craft their own policies. They’re saying, ‘What are we going to do this year?’”
‘No Choice’
At Penn State, administrators say, they had no choice but to reduce coverage. Their self-described “Rolls-Royce plan” offered unusually generous coverage for graduate assistants, including vision and dental care, a low deductible, and an actuarial value of 98 percent, meaning that, on average, students could expect to pay only 2 percent of the actual costs of their health care. “Then,” says Doris Guanowsky, senior associate director at Penn State’s University Health Services, “the realities of the Affordable Care Act came about.”
The law assigns “metal levels” to plans. Bronze plans correspond with 60-percent actuarial value, silver with 70, gold with 80, and platinum with 90. To make plans easily comparable for consumers, the health-care law requires individual plans to fall within two percentage points of each value, so Penn State had to reduce its plan to 92. Meanwhile, coverage costs increased.
The plan remains quite good, but explaining to Ph.D. students that they have to foot extra health-care costs when many are already struggling to make do tripped up the university, Ms. Guanowsky says. “Our students were very upset,” she says. “They just didn’t believe this could happen to them and that the Affordable Care Act actually said this.”
The campus that has perhaps been most roiled by insurance problems is the University of Missouri at Columbia, which has been the site of several protests since administrators announced in August that graduate students would no longer receive subsidies because of the new law. The administration has since delayed that move and set up a panel to study how to provide affordable health care to graduate students.
While the backlash there may be unique because of how poorly the university communicated the change (it informed students only hours before the subsidies were supposed to end), Missouri isn’t the only college that has opted to cut subsidies.
Several universities and their lawyers have interpreted the Affordable Care Act as preventing institutions from providing subsidies for individual plans. In some cases, universities have tried to offset the problems this will cause graduate students. Louisiana State University, for example, decided it would use the money it could no longer provide for subsidies to instead increase stipends.
Most colleges are not making any changes, waiting to see if the Internal Revenue Service, which is responsible for enforcing many of the Affordable Care Act’s provisions, will clarify the rules and allow the subsidies to continue.
“We’re still hopeful that any day now the IRS will either say nobody’s going to get fined this year because of this,” says Mr. Beckley, the consultant, or make “a permanent determination that student insurance is not individual health insurance.” (The agency did not respond to an email from The Chronicle.)
Questions About Dependents
As colleges wrestle with health-care questions, some are finding out how hard it is to please everyone. The University of California at Berkeley wanted to help graduate students avoid increased health-care costs, but its decision to do so by dropping spouses and children from coverage has led to charges that it’s not family-friendly.
“Our decision might feel personal to a few people,” says Claudia M. Covello, executive director of Berkeley’s University Health Services, “but it was about doing the greater good.”
The Affordable Care Act forbids insurers to charge higher rates for dependents. But because dependents are more expensive for insurers to cover, insurance companies have presented colleges with a choice: Pay more in premiums for everyone, or drop dependents. Ms. Covello says the insurer that Berkeley works with, Aetna Student Health, told her that about 50 colleges had already dropped dependents from coverage. (Aetna didn’t respond to a phone message from The Chronicle.)
At Berkeley, 122 students, mostly graduate students, were affected by the move. The university, Ms. Covello says, worked with each family to find alternate coverage. She says the alternative was to require the 22,000 or so people on Berkeley’s student plans to pay an additional $6 million.
But for students like Mallika Scott, in the fourth year of a math-education Ph.D. program, the damage to her finances is real. Ms. Scott is raising two young children by herself; her husband died of cancer in June. The family lives on her roughly $25,000-a-year stipend and Social Security survivors’ benefits. Berkeley has set up a fund to help cover extra costs of dependent insurance this year, but after that Ms. Scott expects to pay an additional $1,400 a year in premiums for her two children, in addition to out-of-pocket expenses.
Ms. Scott wishes Berkeley didn’t frame the issue as one of students with families driving up premiums for everyone else. “It pits students against each other,” she says. “It feels pretty divisive and not supportive of graduate students, who are in a really different position in life.”
As for the choices that Berkeley and other universities are having to make about student health insurance, Ms. Scott says, “it’s a tragedy that we’re in a situation where we have to make those trade-offs.”
Vimal Patel covers graduate education. Follow him on Twitter @vimalpatel232, or write to him at vimal.patel@chronicle.com.
