U Plan is better than the state employee plan

I am frequently asked, “Was the switch from the State Employee Group Insurance Plan to the U Plan a good thing?” Having seen the recent settlement of the state plan insurance for next year, and comparing it to what is offered at the University, my answer is a clear and resounding “Yes!”

A quick comparison of the benefits shows this clearly. Using the benefits for basic coverage, that which will access HealthPartners, the differences are obvious:

ï The state employee plan requires each employee to cover the first $80 of medical expenses each year out of his or her own pocket ($160 for families); the U Plan starts paying with the first bill.

ï The office visit co-pay under the state employee plan is $20 at the primary access level; the U Plan co-pay is $10.

ï Employees who use HealthPartners, our most popular plan, will pay $150 for hospital admission under the state employees plan; it will be fully covered under the U Plan.

ï Outpatient surgery will similarly cost $75 under the state employee plan and will be fully covered under the U Plan’s basic coverage.

ï The state employee plan cuts dental benefits drastically. Its participants will pay 20 percent of the cost of preventive dental work (your semiannual checkup) and 50 percent of all other services. Our plan fully covers preventive work, and provides 80 percent coverage for most dental work except dentures and bridgework.

ï The maximum coverage for dental work is $1,000, and there is a $2,400 per child lifetime maximum for orthodontia under the state employee plan. The U Plan coverages are $1,250 and $2,800.

Yes, we do pay slightly higher premiums, but those higher premiums are more than offset by the out-of-pocket costs that state employee plan customers will pay. Our allocation of premium costs is different, too. Faced by the reality of higher costs that employees must bear, we have made two important choices:

ï We have spread the added cost among all employees, asking both single employees and families to carry that cost. The state employee plan has put almost all of the burden on families.

ï We continue to provide insurance coverage, with low co-pays and deductibles, to all employees. By having higher co-pays and deductibles, the state employee plan has shifted the burden of sickness and injury to those who are seriously ill and least able to afford it.

We believe both of these choices are the right ones.

We have also provided a wider range of options that University employees can choose from. If you pick one of these, the added cost is your responsibility. These include the broader health maintenance organizations (Patient Choice), a preferred provider organization option (Preferred One) and the Definity Health-defined benefit plan. This year, the state employee plan has finally opened up a broader option, its so-called fourth tier, but only if the employee is willing to pay 30 percent of all costs.

So, on balance, the U Plan gives us broader choice and an affordable price. The premium increases this year are difficult, especially in a year that has seen no pay adjustments. The increases in base plan premiums are about $14 per pay period for individual coverage and about $17 per pay period for family coverage. For those earning under $65,000, this will be offset by a $200 one-time cash payment from the University, so the cost should be affordable.

In a University community, we always seek perfection. I cannot say the U Plan is perfect. All I know is it is a lot better than the alternative.

Fred L. Morrison is a law professor and chairman of the Benefits Advisory Committee. Send comments to [email protected]