UC President Yudof responds to letter from UCSA and UCSWU-UAW presidents regarding SHIP

Dear Ms. Morales and Ms. Conley:

Thank you for your email of February 6 regarding the University of California Student Health Insurance Plan (UC SHIP). I share your concerns about the financial stability of UC SHIP and the availability of affordable health insurance for UC students.

I am committed to ensuring student involvement in discussions about options to continue providing affordable health coverage to students while addressing the plan deficit. The UC SHIP Advisory Board was created to provide stakeholders, including students, the opportunity to participate in setting the strategic direction of the plan, including the benefits provided and the premiums charged. The UC SHIP Advisory Board includes a student representative from each campus, as well as the Director of the Student Health Center from each campus. I strongly encourage you to work with those individuals. For your information, I attach the roster for the UC SHIP Advisory Board.

The recommendations from the UC SHIP Advisory Board will go to the UC SHIP Executive Committee, which includes two of the student representatives from the Board. The Executive Committee will, in turn, forward its recommendations to the Council of Chancellors, which will make decisions regarding the plan for the 2013-14 academic year. Our goal is to get these recommendations to the Chancellors no later than early May.

There has been much discussion about the deficit. Let me assure you that the deficit resulted solely from a difference between the premium collected and the actual cost of care provided. That said, we appreciate the concern over recouping the deficit by simply adding it to the cost of the premium. Therefore, we have asked the actuary to present to the SHIP Advisory Committee the projected premium increase without the addition of any dollars for covering the deficit.

The SHIP Advisory Committee has been asked to consider all options in its deliberations, including campuses opting out of SHIP and moving back to a fully-insured plan, if such an option is in the best interest of the students.

With respect to the lifetime and pharmacy caps, let me summarize where we stand. Initially, self-funded student health plans were deemed by the U.S. Secretary of Health and Human Services as not being covered by the Affordable Care Act (ACA). This means that such plans would not be recognized as fulfilling the individual mandate as defined by the ACA, and that students enrolled in such plans would not be recognized as having appropriate health insurance as defined by the ACA. As a result, our students would be subject to financial penalties, since they would be seen as not having health insurance that fulfilled the individual mandate. Working with the Secretary of Health and Human Services, Kathleen Sebelius, we were able to get this changed. In a proposed rule recently issued by Secretary Sebelius, self-insured student health plans are recognized as providing “minimum essential benefits” as defined by the ACA, thus shielding UC students enrolled in SHIP from paying a financial penalty. In the same proposed rule, the Secretary stated that self-insured student health plans are, however, not required to lift the lifetime and pharmacy caps as required by the ACA. We realize this is an important issue for students and we are seriously exploring voluntarily lifting such caps in SHIP. This will, however, require an increase in the premium and we are exploring just what this will be. Again, the SHIP Advisory Committee will be actively engaged in this discussion and decision-making. Let me emphasize that we want SHIP to abide by the spirit of what is outlined in the ACA.

I appreciate your bringing these issues to my attention and look forward to working with you to ensure that all UC students have access to affordable health insurance that adheres to the principles outlined by the ACA.

With best wishes, I am,

Sincerely yours,

Mark G. Yudof
University of California


cc: Provost Aimée Dorr
Executive Vice President Nathan Brostrom
Chief Financial Officer Peter Taylor
Senior Vice President Dan Dooley
Senior Vice President John Stobo
Vice President Steven Beckwith
Vice President Dwaine Duckett
Vice President Judy Sakaki