Health Care Reform and Its Impact on You
- March 22nd, 2013
- in Benefits News
Health care reform will mean changes for each employee. While some changes required by the law have already been made, many others will be phased in over time.
To understand how health care reform affects UA employees, it is important to understand how the University’s group medical plan works. The UA medical plan is a self-funded health care plan, and Blue Cross Blue Shield of Alabama administers the plan for the University. Each month, employees with coverage pay a premium and the University contributes an amount on behalf of employees.
The monthly contributions from the employees and the University are put into a “bucket.” The funds in the plan bucket are used by Blue Cross to process claims received from health care providers.
For example, if an employee goes to the doctor and receives a covered service costing $100, the employee pays a $35 office co-pay at the time of the visit. After the visit, the doctor’s office bills Blue Cross $100 for the service rendered. Blue Cross deducts the office co-pay ($35) paid by the employee from the billed amount ($100) and then takes $65 from the plan bucket to pay the doctor’s office.
Some health care reform changes will eliminate office co-pays or deductibles and are promoted as being free. This is not ultimately the case for a self-funded plan such as the University’s. While the employee may not be required to pay a co-pay or deductible, the cost has merely been shifted from the individual to the UA medical plan.
Using the previous example, if an employee is not required to pay a $35 co-pay for the service, the doctor’s office still bills Blue Cross $100. Instead of taking $65 from the bucket, Blue Cross now takes $100 to pay the doctor.
As additional health care reform changes are implemented in the coming months, it is important for each employee covered by the UA health insurance plan to be an informed consumer. Ultimately, all plan members and the University will still pay for services referred to as free.
Other Health Care Reform Issues
In 2014, health care reform legislation will require up to $909,000 to be paid from UA’s medical plan to help health insurance companies manage the hard-to-predict cost of covering currently uninsured individuals across the nation.
Because UA’s medical plan is funded by both employees and UA, this will result in additional costs for both the University and UA plan members.