Penn State To Add Deductibles, Make Other Changes To Worker Health Plans

Penn State will introduce deductibles and some higher co-payments to its employee health-care plans starting in 2011, the university announced this week.

A deductible is a pre-set amount that a plan enrollee must pay for medical services before insurance coverage kicks in. For individuals with single-person coverage, the deductible starting in 2011 will be $250 a year; for families, it will be $250 per person and $500 for the whole family, according to Penn State.

Single parents responsible for a child or children will see a $250 deductible for one person and an overall $375 deductible for the family, the university noted.

‘Unless we change our approach to health care, the employee contribution per pay period will continue to increase as dramatically as health-care costs continue to soar,’ university Vice President for Finance Al Horvath said in the written announcement. ‘The changes we’re making are necessary to control costs both for the university and for our employees. This new model keeps basic coverage costs for everyone as low as possible.’

As for co-payments, the price for emergency-room visits will climb from $50 to $100 apiece, though Penn State reported the fee will be waived if the patient is admitted to the hospital. Co-pays for specialist visits, now $15 apiece, will be $20.

Co-pays will not count toward the deductibles, according to Penn State. Likewise, costs for many preventative services — such as physical exams and blood-pressure screenings — will not count toward the deductibles,  either, according to the university.

More complete details about all of the health-plan changes are outlined on the university’s official news website, Penn State Live.

The university has projected that its budgeted health-care costs for 2010 will reach $183 million. That total would reach $206 million next year if Penn State did not make any changes, according to the university.

Right now, employees cover about 19 percent of those costs through payroll deductions, and the university budget absorbs the rest.

Penn State spokeswoman Annemarie Mountz noted that the 2011 changes are part of the university’s strategic plan, which emphasizes cost controls. But she said the university remains committed to keeping health care affordable for employees. She underscored that employees saw no changes to health-care premiums last year, when most of their salaries and wages were frozen, and that the idea of a deductible has long been commonplace in other sectors.

‘By adding the deductible, we’re taking the burden off of everybody,’ she said, because ‘the premiums (will not be) as high as they otherwise would be.’

Highmark administers Penn State’s health-care plans, but the university is self-insured. That means the costs of workers’ health and medical services are financied not by the insurance company, but with university funds.

Earlier coverage: Penn State To Workers: Expect More Cost-Sharing