MIT Medical Begins Response to Recommendations
By Rosa Cao
Three months after the MIT TaskForce on Medical Care for the MIT Community submitted its final report, an internal working group convened by the office of the Executive Vice President with representatives from the Medical Department, Office of Finance, and the Benefits and Human Resources Department is reviewing the 42 specific recommendations listed in the report, delegating groups of issues to each of the departments and assigning timelines for their implementation.
MIT Medical Head William M. Kettyle said that the new student premiums for the next academic year, due to be announced by the end of the month, are expected to stay the same, both for the MIT basic plan, which is included in tuition, and for the Student Extended Insurance Plan, which is partially subsidized by MIT’s departments for graduate students with research and teaching assistantships. Student premiums for family coverage are also expected to stay the same or fall slightly. Family premiums for the SEIP have gone down significantly in the past two years, after a drastic increase three years ago.
Task force chair Paul Joskow wrote in an e-mail that the Task Force would be briefed on MIT’s response to the report on March 7th. Kettyle wrote in the Jan/Feb issue of the faculty newsletter that the report should be “in time to have a significant impact on the generation of the Medical Department’s Fiscal Year 2007 budget request.”
In response to the more urgent recommendations of the task force report for shoring up the Medical Department’s Budget, MIT medical has “prepared a request for increased funding and for increased staffing,” to address concerns about the drop in quality of care that primarily had to do with reduced access to care and increased waiting times. The additional resources, some of which have already been approved, are expected to come from insurance premiums and increased fee-for-service revenues, neither of which are expected to be a significant cost for students.
Vice President for Human Resources Laura Avakian said that changes such as the communication plan for Medicare D were examples of “low-hanging fruit” that were already in process while the task force was working, and have already been implemented.
MIT offers a diverse array of health plans; different demographic subgroups within MIT subscribe preferentially to different plans. The report called for “improved risk pooling and adjustments for demographic differences across health insurance plans” as consistent with the recommendations of the Strategic Review of Benefits committee, “to be implemented as soon as possible.” These changes would deal exclusively with employee health plans and would not affect student premiums.
MIT is “self-insured”; that is, it calculates the insurance premiums for each plan separately, based on the cost of the providing care to that group of subscribers over the past year and the projected cost for the upcoming year.
In any year there are a certain number of “catastrophic claims,” which are much higher than those incurred by other members of the group.
Professor Peter Diamond, a consultant to the task force, said that pooling of catastrophic claims across health plans “is one way to bring costs [for each of the plans] closer to the theoretical ideal.” It would also help stabilize premiums for plans with relatively small numbers of subscribers.
Avakian described another potential fix for redistributing plan costs for different demographic groups. “It’s been a long-standing interest that many employees have had at MIT, creating a category for insurance premium paying of ‘employee + 1’.” Such a plan would provide insurance for one employee and a partner or dependent, and would have less expensive premiums than the traditional family plan. It could also create problems for MIT’s self-insurance model because “when MIT is paying all the bills, if you charge one part of the population less, then you shift cost somewhere else, logically to the families,” Avakian said.
One way to offset higher family premiums could be to couple the introduction of the new plan with a version of “salary bending,” where employees with higher salaries would pay more for the same insurance plan; as the task force report notes, wage-related premiums are controversial and “would benefit from additional analysis and consultation with the MIT community.”
GSC representative Eric Gordon Weese G called the situation “improved” and his colleague Andrea Elizabeth Schmidt G described the current family rates as “reasonable.”
Kettyle emphasized the importance of a reserve fund for guaranteeing stability in student premiums despite year-to-year fluctuations in the cost of the plans.