Bill to require lifting of SHIP coverage caps moves forward

  ·  Mitchell Handler, The Daily Californian   ·   Link to Article

A bill that would forbid lifetime and annual limits on certain benefits of the UC Student Health Insurance Plan passed through a California State Assembly committee with bipartisan support.

AB 314 would force health insurance plans run by a university or college to comply with a section of the Affordable Care Act that lifts limits on lifetime and annual coverage of essential health benefits. Because UC SHIP is a self-funded plan — students pay into a health care fund that the UC system manages — it is exempt from the health care reform law and currently imposes a $400,000 lifetime coverage cap and a $10,000 annual prescription drug coverage cap.

“We felt it’s important that students have the same protections as every other American,” said Assemblymember Richard Pan, D-Sacramento, who is the lead author of the bill. “I think that it’s important that the state make a firm decision and make it law that students deserve the same protections as other insured Californians for their health plans.”

Under AB 314, UC SHIP would not be allowed to impose caps on the 10 categories of “essential health benefits” as defined by the Department of Health and Human Services, including prescription drugs, hospitalization and maternity and newborn care. Like all health insurance plans that are regulated by the Affordable Care Act, limits could still be put in place for health care that does not fall under any of the essential benefit categories, like adult dental care.

The movement to lift the caps comes as UC SHIP is facing a projected $57 million deficit by this summer. The UC Office of the President has considered raising premiums by an average of 25 percent systemwide as a way to close the deficit. Lifting the coverage caps would require another premium increase, although it is expected to be significantly smaller than the increase proposed to close the deficit.

Although the university does not have an official position on AB 314, UCOP spokesperson Shelly Meron said the UC system is currently analyzing the costs of lifting the caps.

“As the university considers removing the caps, we’re cognizant of the need to keep the plan financially viable and affordable for students,” Meron said in an email. “We have to balance all of those factors as we move forward.”

After passing through the Assembly Committee on Health, the bill now awaits the chamber’s appropriations committee.

“The Obamacare law, the ACA, makes these kinds of caps illegal, and we don’t believe that the UC system should have the ability to implement a rule that, just because they can, adversely affects a portion of the UC student population,” said Darius Kemp, director of organizing and communications for the UC Student Association.