The University will be switching student health insurance providers next year, the Student Health Insurance Review Committee (SHIRC) announced last week. The move will lower overall costs for students, although the change will not be as broad as SHIRC had initially hoped.
Since 1999, students without preexisting healthcare coverage have bought a co-insurance plan from Chickering Aetna. Under that plan, students last year paid a set premium—or upfront cost—each quarter, the first $200 of each medical bill, and 20 percent of the remaining bill. After a student has paid a total of $1,700 in medical fees incurred from this 20 percent charge, Chickering covers all other costs for the rest of the year.
Under the University’s new provider, Student Resources, a member of the United Healthcare network, student premiums will increase four percent, but students will only pay 10 percent of remaining costs.
According to Associate Dean of Students in the University for Student Health and Administrative Affairs Celia Bergman, who sits on SHIRC, the committee was prompted to switch providers after Chickering presented them with a 30 percent increase in premium costs with no change in coverage.
“Chickering expects that 80 percent of premiums will go towards paying medical claims, and the other 20 percent is retained for themselves,” Bergman said. “We’ve only seen 65 to 70 percent used for claims. They’ve been making a lot of money off of our account.”
According to Bergman, last year SHIRC also considered dropping Chickering, but were offered an 11th hour bid for a one percent increase. This year, the best package Chickering offered was a 15 percent increase.
SHIRC is made up of eight administrators, three College students, three doctoral students, and a masters student.
Fourth-year and SHIRC member Dan Kimerling said that the committee began requesting bids soon after hearing from Chickering in February, and that Student Resources was the most competitive alternative.
“Given inflation, four percent is pretty reasonable,” he said. “And [Student Resources] already has a strong relationship with University hospitals, which leads to larger discounts.”
Bergman praised Student Resources capabilities to lower overall costs for students.
“United has already negotiated discounts at the Medical Center, so doctors’ bills won’t be as high from the start, so student costs won’t be as high. Chickering doesn’t have those discounts,” Bergman said.
While the move is expected to bring lower costs than the current system, members of SHIRC had hoped for a more drastic change. Members said that from the start, the committee was eager to switch not only providers, but to change the structure of the plan from co-insurance to co-pay.
In co-pay plans, students pay higher premiums at the beginning of each year, but instead of paying percentages of bills, they pay set fees—$25 for X-rays, for example.
“Student Resources offered us a co-insurance plan first, and we asked them to price out a co-pay structure,” Bergman said. She added that with the co-pay structure students would pay over nine percent more than under Student Resources’ co-insurance plan—almost $200.
Despite being more expensive than co-insurance plans, co-pay plans were favored by the committee because of their standardized fees.
“It helps students plan better and will hopefully incentivize them to plan and get the health care that they need,” Bergman said.
SHIRC member and graduate student Yelena Koldobskaya was a staunch supporter of moving to a co-pay system. She said that she knows several students that forgo some treatments because of the uncertainty of the cost, which prompted her to push for the change.
“It was long overdue,” she said. “You don’t know what you’ll end up paying [with co-insurance]. Everyone on SHIRC was for it.”
According to Bergman, SHIRC recommended a co-pay plan from Student Resources to Vice President and Dean of Students Kim Goff-Crews, who had the final say on the decision two weeks ago.
Goff-Crews rejected the co-play plan over SHIRC’s recommendation but approved the decision to switch to Student Resources.
“In general, I never have huge changes without broad conversations,” Goff-Crews said. “It makes sense to do it, though. Conceptually, it’s great.”
Goff-Crews added that one of the main reasons she decided to hold off on a decision on co-pay plans was that the increased premiums would affect College and masters students more than graduate students, since graduate student premiums will be paid by the University for their first five years, and that she wanted adequate feedback from those groups.
Koldobskaya, who is in her fifth year, took issue with Goff-Crews’s decision.
“I’m not saying that the plan was perfect, but I think it was better than what we had,” she said. “If [the administration] is so concerned about the extra $200, why aren’t they concerned about the extra $2,000 in tuition? They just need to rebuild the whole system.”
In response to an e-mail sent to her by Koldobskaya, Goff-Crews said, “While [some students] may not be concerned by paying an extra $200, many students will be.”
Goff-Crews said in an interview that she will be examining the issue in the fall and hopes to come to a decision in time for changes to take place for the 2009–2010 academic year.
“It’s not that it’s not going to happen; it’s just not going to happen in ’08–’09,” Bergman said.