Workers, Experts Weigh Impact of Health Plan Changes

While some activists worry that the new Harvard health benefits plan announced last week may increase the cost of healthcare for some non-union employees, others say that the changes help balance the costs of the University's health system.

The restructured plan now requires employees to pay a $250 deductible for care that extends beyond routine visits and tests, thereby increasing potential out-of-pocket costs. To mitigate the financial burden, the University said last week that it expects to reduce monthly premiums and implement a cap on maximum out-of-pocket insurance costs.

The University will still cover the full cost of preventative care, including regularly scheduled doctor visits and other annual tests and screenings.

Still, the changes might create “an affordability problem,” according to Harvard School of Public Health professor Nancy Kane, who formerly served on the University Benefits Committee, the body that recommended the changes.

“With the caps on [out-of-pocket costs], I feel less concerned,” she said. “If there were no caps on it, it would be terrifying.”

As employees try to figure out how the new plan will affect their yearly insurance costs, some worry the changes will inflict greater harm than benefit.

“It’s a major cost shift, plain and simple,” said Harvard Union of Clerical and Technical Workers Director Bill Jaeger. “These changes are going in the wrong direction.”

Some worry the changes may increase disparities between union and non-union employees of the University. Union members negotiate separate health benefits contracts and were therefore not affected by the changes.

“It’s going from what has been a whole community program to a fragmented assortment of plans,” Jaeger said, adding that he has seen “lots of backlash” from the non-union employees who are upset about anticipated increases to their health care costs.

Jaeger also said that he worries the changes may disproportionately harm lower-paid employees who cannot afford the higher out-of-pocket costs.

The University has cited rising healthcare costs nationwide as the driving force behind the changes. A Center for Health Information and Analysis study released at the beginning of the month reported that overall health spending grew 2.3 percent in Massachusetts during the past year. Health benefits currently account for about 12 percent of the University's budget.

Given the rising cost of insurance, some people said they understand why the University chose to implement the cost-controlling measures.

“People are going to be more negative than positive because money is going out of their pocket faster,” Kane said. “But they don’t know the alternatives; it could be much worse.”

Incorporating deductibles and coinsurance are standard industry policy. According to a 2013 Kaiser Family Foundation report, 78 percent of insured workers in the U.S. pay a general annual deductible.

“I think nuanced cost-sharing in insurance can be a really useful tool in steering health care resources towards where they can produce the most health,” School of Public Health professor Katherine Baicker said.

Harvard’s Office of Human Resources has not yet solicited feedback on the plan from employees, but it has received a small number of fact-based inquiries regarding the details and nuances of the plan, according to spokesperson Tania deLuzuriaga.

—Staff writer Mariel A. Klein can be reached at mariel.klein@thecrimson.com. Follow her on Twitter @mariel_klein.