UC SHIP cuts off benefits at lifetime cap

A provision in the University of California Student Health Insurance Plan (UC SHIP) that cuts off benefits at a lifetime cap has recently stirred controversy among students and employees affected by the limits.

Lifetime benefit caps, which are the maximum dollar amount of coverage that UC SHIP will cover, are currently set at $600,000 per student for UCLA, and $400,000 per student at most of the other UC campuses, said UC SHIP Director Heather Pineda.

She said the caps are strictly a cost-control measure to protect students as much as possible from high premiums and out-of-pocket costs.

Provisions in the Affordable Care Act (ACA), a federal statute that will go in full effect by January 2014, state that health insurance policies must eliminate most lifetime benefit caps.

UC SHIP, however, is exempt from the federal statute because the language in the ACA does not provide for jurisdiction over self-funded student health care plans, Pineda said.

UC SHIP is self-funded, which means that the university, as opposed to a private health insurance carrier, is responsible for its own risk.

But the university’s policy on lifetime caps has prompted criticism from people who contend that students with chronic conditions and graduate students can be heavily affected by the caps.

Zachary Williams, southern vice president of UC Student-Workers Union Local 2865 and a UCLA political science doctoral student, said the union and the UCLAGraduate Students Association have been trying to get the UC to comply with the ACA and eliminate the lifetime benefit maximums.

He said graduate students have a higher risk of running over the cap because they tend to spend a longer time at the UC and tend to be older than undergraduates.

Kenya Wheeler, a UC Berkeley graduate student, said he has felt the effect of the caps. While studying city planning at UC Berkeley’s College of Environmental Design, he experienced a series of seizures in fall 2011.

Wheeler said he was a “relatively healthy” student who biked to campus everyday, but was required to have brain surgery to alleviate his symptoms, and a month later was diagnosed with T-cell CNS lymphoma, a rare type of cancer that affects the central nervous system. Treatment for the disease involves two stages of intensive chemotherapy along with expensive medication and extended hospital stays, he said.

For coverage of his treatment, Wheeler said he relied on UC SHIP, which had already covered his brain surgery. But he calculated the coverage would not be enough to pay for all of his chemotherapy treatments because of the lifetime caps.

For students who have reached their benefit caps but still need coverage, there are a few options to help them pay for treatment, Pineda said.

Students who have hit their maximum lifetime benefit typically have traumatic injuries or chronic illnesses and could qualify for Medi-Cal, California’s state welfare program, or convert from UC SHIP to an individual Anthem Blue Cross plan, she said. Students cannot be denied coverage under these options, Pineda said.

However, Wheeler said both these options were simply too expensive for him.

After reaching his maximum benefit cap, Wheeler was still faced with thousands of dollars in unpaid medical fees. The problem of paying the medical bills led him to rush to marry his current wife in order to get onto an affordable health insurance plan, he said.

“We had talked about getting married before, but this caused us to accelerate our plans,” he said. “We ended up getting married at the hospital on March 30, 2012. … In many ways it was out of necessity.”

Some students at UCLA said they think the benefit caps are in place for good reason.

Kimberly Alcorn, a second-year mathematics student, said it would be unrealistic for the plan to cover everybody’s expensive illnesses.

“I feel the UC insurance is a privilege,” Alcorn said. “(UC SHIP) is supposed to be a temporary thing for before you get on your feet and get a job and your own health insurance.”

Williams said he thinks the UC is sending the wrong message by not complying with federal standards.

“The things that would make people reach the caps are diseases that people can be struck with out of nowhere,” he said. “That could happen to any one of us.”

Despite the criticism, Pineda said the UC intends to keep its policies the same for the time being because removal of the caps would raise prices for all students covered by UC SHIP.

“If you remove the benefit maximum, then the potential cost is unlimited,” she said. “It would increase the cost of the plan for every plan member because it would increase the potential liability.”

Email Kevin Truong @ ktruong@media.ucla.edu.