Considering health care in light of the Affordable Care Act

Ira Friedman, director of Vaden Health Center (photo by Linda Cicero)
Ira Friedman, director of Vaden Health Center (photo by Linda Cicero)

The Affordable Care Act will eventually present Stanford students, all of whom must have health insurance, with new choices. Those choices, however, won’t be known until January. Ira Friedman, director of Stanford’s Vaden Health Center, talks about the choices students and their families must make in the face of health care reform.

What is new about student health insurance this year?

Over the course of the coming academic year, we’ll see exciting changes. Under the federal Affordable Care Act (ACA), every state will open health insurance exchanges for the first time. In California, the state health insurance exchange options will become available Jan. 1, 2014. Students should have more options for coverage, so they will need to become more informed. We are watching the developments as the state health exchanges make information available, and we suggest students stay informed as well.

What are the implications for Stanford students from ACA?

The act includes many benefits for college students, who are part of the young-adult demographic targeted by health care reform. First, as many families are aware, since January 2012, students can remain under their parent’s employer-based health coverage until they turn 26. Second, the act strengthened insurance plans by requiring that everyone have access to a minimum set of benefits, such as specific preventive-care services, without a patient co-pay and mental health coverage on par with medical coverage. Beginning in January, many students will have access to additional health plans through each state’s health insurance exchange. ACA has also meant, however, higher costs for established health care plans, such as Stanford’s Cardinal Care.

Why do students need to have health insurance at Stanford?

For quite some time, the university has required students to be covered by health insurance. We want to prevent students from having to interrupt their studies due to illness and also from incurring overwhelming debt to pay for unforeseen health care expenses. Most importantly, it is not acceptable for a lack of adequate health coverage to be a barrier for students to obtain necessary health care.

How can students learn more about their health insurance options?

Vaden Health Center sends a summary of the next academic year’s Cardinal Care coverage and costs to all students and to parents of undergraduates in late spring or early summer. The Vaden website has more information.

Students can learn about the coming health exchange options for California residents at The choices will be different in each county, and there are still many unknowns. We don’t yet have complete information on plan benefits, which physicians and health providers will accept these plans or costs. Also, California is actively setting up rules and processes for individuals to establish eligibility. Some Stanford students may want to obtain coverage from their home state of residence.

What advice do you have for parents?

When considering the balance of costs and benefits, keep in mind that many primary care medical and mental health services are covered at Vaden Health Center under the campus health service fee. Parents should be cautious of insurance plans that do not cover specialist care and testing in the Stanford area. That might require a trip back home for treatment. Plans should cover treatment by Stanford’s medical faculty at our university medical center. Also, employer plans may have options with very large deductibles, sometimes thousands of dollars. Families should reflect on whether they are truly prepared to pay the full deductible in the event of unanticipated illness or injury.

What advantages are there to Cardinal Care?

Students have a number of options to meet the health insurance requirement, including their parent’s employer coverage, a spouse’s coverage, an individual plan purchased through a broker or an insurance company or Cardinal Care, which is the university-sponsored plan. Specifically designed for students, Cardinal Care coverage is both broad and deep and includes access to Stanford faculty specialists and hospital care at the university’s medical center.

Why has the cost of Cardinal Care gone up?

Cardinal Care’s carrier, Health Net, bases its premium rates on our students’ utilization and costs from the previous year. The number of services used and the cost of those services have been going up. In addition, the ACA mandated that additional benefits be offered, such as specific preventive services without a patient co-payment. The act also called for additional taxes, which must be included in the premium. Altogether, it was a hefty increase of around 9 percent. To minimize the increase in premium, we increased some of the copayments and out of pocket maximums.

Why is Cardinal Care expensive compared to the insurance plans of some other schools?

In the end, it comes down to the strength of its benefits. But let’s make sure to compare apples to apples. We know that Cardinal Care’s cost is based on the prior year’s health care expenses for the group. We have an independent analysis of these costs, which are higher for Stanford for several reasons.  First, our Cardinal Care population is made up largely of graduate students, who may use more services than younger undergraduate students. Second, the Palo Alto area is among the most expensive for health care. Finally, if you compare plan benefits, you’ll see that Cardinal Care covers a higher percentage of each health care expense (including international coverage) than most any other university plan. Some universities are able to save money by self-insuring their student insurance plans, but this practice is prohibited for private universities in California.

For more, visit the Vaden Health Center site.