Affordable Care Act at UCSF: What You Need to Know

This fall marks the third year that UCSF students under the age of 26 have had the option of staying on their parents’ health insurance plan instead of switching to university coverage.

The gargantuan Affordable Care Act (ACA), known by its popular moniker ObamaCare, includes in its many provisions the possibility for young adults to stay on their parents’ health insurance plans.

“I didn’t want to have another $3,000 of debt,” said first-year medical student David Ramirez, of his decision to stay on his parents’ health insurance and not to enroll in the University of California Student Health Insurance Plan (UC SHIP). 

Despite the savings, he has had difficulty establishing medical care in a new city without a connection to providers.

Fellow first-year medical student Jill Hagey, on the other hand, enrolled in UC SHIP both because of its convenience and its cost. “For me, it was going to be more expensive to stay on my family’s plan than to enroll in [UC SHIP],” said Hagey.

The landmark ACA is changing the face of health care in the United States. Ramirez and Hagey’s decisions indicate how the complexity of health insurance and of the tax codes creates different economic incentives for the different individuals covered.

ACA Expands Benefits

The ACA seeks to extend insurance coverage to more people and to increase the benefits of insurance. This involves expanding the reach of both public and private health plans.

In the public sector, Medicaid, the government health insurance plan for the very poor, is being extended to single adults without children. In the private sector, health insurance marketplaces have been created to allow individuals to comparison shop for health insurance, based on the cost of benefits.

Additionally, individuals in this marketplace cannot be denied coverage because they have pre-existing  health issues, and their insurance rates are not tied to their overall level of health. 

In order to expand the pool of people buying insurance, a tax will be levied on those who refuse to buy insurance, unless they qualify under a few very specific exemptions, such as objections based on religious conviction.

Opposition on Both Sides

This strategy of increasing the number of insured individuals has run into opposition on both sides of the aisle in Congress. Many conservatives feel that the government is infringing on individual liberties by forcing Americans to buy health insurance, while many liberals feel that the law does not extend coverage far enough. Especially galling to liberals is the fact that many low-income individuals will still not be able to obtain coverage under Medicaid.

As a result of the June 2012 U.S. Supreme Court ruling limiting the law’s expansion of Medicaid, about half of all states have chosen not to expand their Medicaid programs. Governors of these states assert that the program is either too costly to implement or simply a waste of money.

“The bottom line here is that Medicaid is a failed program,” said Gov. Rick Perry of Texas. “To expand this program is not unlike adding a thousand people to the Titanic.”

Regardless of where one stands in the debate, there is no doubt that the law stands to have sweeping effects.  The insurance industry is facing mounting pressure to comply with the many new regulations, such as ensuring that 85 percent of all premium dollars are spent on health-related activities.

How ACA Affects UCSF Employees

In light of these changes, many employers have announced major shifts in the insurance coverage that they are offering.  UCSF is no exception.

Because of skyrocketing premiums, UCSF is eliminating four insurance plans this year and replacing them with two new plans, which have lower premiums but also more restrictive networks. Employees with long-standing ties to physicians who are out of network will have to pay higher out-of-pocket costs to continue to see them, according to the UC Open Enrollment website,

The University of California is offering a revamped menu of plans for 2014. The two new ones are: UC Care, UC's own three-tier PPO (preferred provider) plan, which offers members access to UC doctors and hospitals as well as the Blue Shield PPO network; and the Blue Shield Health Savings Plan, which features a UC-funded health savings account.

Health Net Blue & Gold, Kaiser Permanente, Western Health Advantage and Core (administered by Blue Shield) will still be available. Four plans — Anthem Blue Cross PPO and PLUS, Anthem Lumenos with HRA and Health Net Full HMO (health maintenance organization) — are being discontinued.

“The costs for these plans continue to increase at a much faster rate than the other plans,” said Michael Baptista, UCOP Executive Director of Benefits Programs and Strategy. “Neither the university nor employees can continue to absorb double-digit annual increases.”

Employees currently covered by Anthem Blue Cross PPO, Anthem Blue Cross PLUS and Health Net HMO will pay lower monthly premiums next year, regardless of the new plan they choose. Savings will depend on the new plan, their salary band and the number of their dependents covered.

UC will continue to cover an average of about 85 percent of the cost of the premiums. The final premiums will be announced soon.

The Republican Party has repeatedly challenged the ACA, with the intent of abolishing the law. However, despite the recent government shutdown and the threat that Congress might refuse to raise the debt ceiling and allow the nation to default on its obligations, its opponents have not so far managed to overturn the law. The ACA is here, and its various and sundry provisions will affect all of us for years to come.