State rejects plan by insurer to cover new college grads
Tufts Health Plan wanted to give college students a chance to buy health insurance for the first year following graduation at discounted group rates, but the Division of Insurance says uninsured college graduates do not meet legal requirements for a group.
In a letter last April, the chief lawyer for the Division of Insurance said the loose relationship between a college and its graduates is unlike the closer relationship between an employer and its employees. Under state law, the program, called GradCare, could only qualify as a plan for individuals.
Tufts is appealing the decision to the Division of Insurance.
A spokesman for the Insurance Division, Chris Goetcheus, said the proposal has merit, ''but the hearing officer has to wrestle with whether it conforms with our group health law. There can be good concepts but they still have to conform with the law."
Tufts had started marketing the plan to area colleges, and planned to offer it to 2005 graduates. Instead, many of the roughly 130,000 students who this year obtained bachelor's degrees in Massachusetts will remain uninsured.
One of them is Adam Shoop, who graduated from Emerson College with a degree in political communications. Shoop, 23, lives in the North End and works two part-time jobs, in the produce department of a Back Bay supermarket and as a computer support provider at Emerson.
Neither job offers health insurance and earlier this year painful symptoms sent Shoop to the campus infirmary several times. The condition was eventually identified as irritable bowel syndrome, an ailment that affects more than 10 percent of the population.
''I think about health insurance quite a bit," said Shoop, a native of Salem, Ohio. ''I looked into state plans for low-income health insurance, but I don't qualify because I slightly exceed the federal poverty guidelines."
The delay in offering GradCare has frustrated some college administrators.
''I was disappointed that the Division of Insurance didn't approve it, because the governor and the state have been promoting coverage for everyone," said Neil Buckley, vice president of finance and administration for Emmanuel College in Boston's Longwood Medical District. ''This is a group that lacks coverage, and here's one easy step that could take care of it."
Buckley said Emmanuel planned to offer coverage to the 350 members of its class of 2005. Graduating students would be able to pay premiums of $245 a month to purchase health coverage for a year -- considerably lower than the cost of individual coverage, which can easily be twice as much as a group plan.
''This is filling a real need in the market," said Buckley. ''Going out as an individual seeking coverage is very costly."
In recent months, Governor Mitt Romney has promoted extending health insurance to 500,000 Massachusetts residents who lack coverage. His plan would reduce the number of uninsured by putting all eligible people on Medicaid, and by providing low-cost insurance plans and state subsidies for others. The state would also penalize those who fail to secure coverage by taking away tax breaks or seizing part of their wages.
Rob Egan, Tufts' vice president of marketing, said the Waltham nonprofit insurer's research found that more than half of graduates don't immediately start jobs that provide insurance. ''Everybody needs some sort of medical insurance," he said. ''We recommend all segments of the population get coverage."
Under GradCare, colleges would sign up to offer the coverage to new graduates, who could enroll up to three months after graduation. In addition to the $245 monthly premium, there would be a $1,500 deductible for hospital care or special diagnostic tests. Drug prescriptions would include copayments ranging from $10 to $45 for a 30-day supply, after an initial $100 pharmacy deductible.
Tufts began seeking approval of the plan last fall. But in February, the Division of Insurance questioned whether GradCare qualified as a group product. Tufts argued that it did qualify because the plan would be sold to colleges and universities, which would then make coverage available to graduates. Tufts officials said similar insurance products are sold in other states, including New Jersey, New York, and Vermont. The company is Massachusetts' third-largest health insurer with 657,000 members.
The Division of Insurance rejected the GradCare plan April 8, according to Tufts. An appeal before a hearing officer is underway. The officer has the authority to rule on the appeal.
Jeffrey Krasner can be reached at krasner@globe.com. 