Frequently Asked Questions
1) Why is it that with so many employees, OU cannot negotiate better health insurance premium rates from insurance carriers?
The size of an employee population is one factor that determines an employer’s insurance premium rates. The more employees there are to spread the risk, the better the rate will generally be, up to a point. However, once a certain size is reached, additional employees don't make that much of a difference. In fact, the bigger factor is how much those employees use their health insurance benefits. At OU, our employees are frequent users of health care services for a number of reasons – for example, our employees (and higher education employees in general) are older than the national average, and tend to need to visit the doctor more than younger employees.. When OU negotiates premiums with an insurance company the rates are based directly on our past use of health insurance benefits. This use of plan benefits is the most important driver of our annual premium rates
2) Would a coalition with other Oklahoma public colleges and universities provide lower medical premiums?
The Council of Business Officers (COBO) for colleges governed by the Oklahoma State Regents for Higher Education has formed a task force to review this very question. The task force has met several times, but has not reached a conclusion on whether pursuing medical insurance options as a group is feasible. Several significant issues have been discussed and would have to be addressed before this option would be pursued further. The state public colleges are geographically dispersed and vary significantly in size and number of employees and dependents. These organizational differences would make finding medical plan options that meet everyone’s needs difficult. Larger organizations like OU might find better options independently than as part of a coalition, as we have enough participants to exercise some buying power. But as noted in the answer above, it’s not just the number of participants that dictates whether lower cost options are available. We will continue to actively participate in the COBO task force so that we may fully assess the value of OU's participation in any efforts to develop a health insurance coalition with other state universities.
3) Why can an individual often find a better premium rate with a private company such as Blue Cross?
In the private health insurance market, premium rates are generally based on an individual’s health status. When applying for a non employer-sponsored policy, an individual and his or her dependents must medically qualify and meet the carrier’s specific health criteria. Healthy individuals generally qualify for lower premiums; however, those with known health issues (e.g., diabetes) can expect higher premiums if they are even accepted by the private carrier.
Note: Employer-sponsored plans are prohibited from applying this type of practice within their employee populations. Employers must take on all employees and dependents in a health insurance plan regardless of health status.
4) What might the Committee’s study mean for retirees?
OU’s retiree medical benefit is one that is not provided by many employers; the Committee is very aware of the value of retiree medical coverage for OU retirees, and of the need to preserve that coverage for current retirees. Retiree medical costs are a significant driver of OU’s overall health care expenses, and thus, the Committee is exploring how OU might most effectively design and structure our retiree program going forward. Many of the issues that the Committee is studying--wellness, health care cost drivers, plan designs and coverage -- will also apply to retirees. The Committee is also exploring other issues that relate specifically to retirees: eligibility criteria, and Medicare supplement coverage. With that said, it is too early to say that any conclusions have been reached about retiree coverage; it is one component of the Committee’s review.
5) Why is it that our health care plans do not use OU’s physicians and facilities more, by providing better discounts or incentives to use them?
OU’s health insurance plan has always had a wide variety of choices for employees in terms of hospitals and physicians, and the OU physicians and facilities at the Health Sciences Center in Oklahoma City and the Tulsa Campus are part of the current Aetna network.
The OU Physicians’ clinics and practices are self-supporting; there is no State-appropriated money provided to those entities. In addition, many of the OU physicians are specialists, whose practices are currently close to capacity, treating those in the most need from across the entire state. So asking those providers to provide a greater discount, or to handle more patients, is not an easy fix for the University’s health care problems.With that said, the Committee does intend to explore the feasibility of special contracting arrangements with OU’s medical providers in the future.
6) Is the Committee considering development and support of programs designed to improve employees’ health as a part of its recommendations?
The Committee has already recognized a need for the University to expand on and improve the wellness programs offered to employees. However, there is no one program or one answer that fits every employee’s needs. For example, wellness programs must be constructed in ways that create fair and lasting incentives for employees to really change lifestyles. Disease management programs that are run by the insurance carrier are also a major part of wellness.
All employers struggle with ways to properly present such programs and to measure the results. It will be the Committee’s responsibility to recommend the right wellness programs for OU’s employees; and it will be employees’ responsibility to commit to participation and the subsequent behavior changes that may be needed.
7) Will the Committee consider the feasibility of introducing a lower-cost, high deductible health care plan option that might cover only catastrophic illnesses?
Many organizations have moved towards these types of plans, and as the Committee explores the possible costs and benefits of such plans to the University, it will be critical to recognize and analyze the fundamental trade-offs inherent in a high deductible health plan. For example, under a high deductible health plan, an employee’s premiums may be substantially lower than under a traditional preferred provider plan. If the employee is an infrequent user of health care benefits, he or she can expect lower out-of-pocket costs under a high deductible health plan, too. This tends to drive healthier employees into the plan, which in turn, can impact the premiums associated with an employer’s other health plan options.
There are employee education implications, as well. Individuals who participate in a high deductible health plan need to understand the costs for which they may be responsible. They also need to invest time in understanding how plan benefits work, because in most cases, they will pay the full cost of their care until reaching the plan’s deductible.
8) Many employees are struggling with the high cost of dependent coverage. At the same time, employees with single coverage want to preserve their insurance with no premium contribution. How will the Committee balance these different positions?
We have heard very strong and varied responses from employees in different situations. The difficult reality that faces the Committee is that no solution will satisfy everyone. The different needs of individual employees must be balanced against the needs of the organization. This is a major issue the Committee will be grappling with as their work progresses.
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