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November 10, 2009

Is U-SHIP all it could be?

The national debate presents an opportunity to reexamine University health care.

The ongoing debate over health care raises some interesting questions about the health insurance that students receive through the University Student Health Insurance Plan (U-SHIP). The total cost for one year of U-SHIP basic coverage is $2,025. Three quarters of Student Life Fees for graduate students—78 percent of which goes toward health and wellness services—comes to $714. Thus, a graduate student who enrolls in the basic U-SHIP plan will fork out $2,739 for the 2009-10 academic year. Since the one thing that students everywhere agree on is that college and graduate school cost far too much, should we just accept that $2,739 is the best deal we can get?

Even among a student population that encompasses a more narrow age bracket than the nation as a whole, apparently there are still some striking differences in terms of costs. An article available on the University’s Student Health Affairs Web site entitled “Why Student Health Insurance Rates Vary by School” contains some interesting statistics about the costs of health insurance for students. The author of the article, an actuary for the Chickering Group named Paul Cronin, claims that graduate and professional students have health insurance costs that are an average of 160 percent higher than those of undergraduates. (I guess our bodies begin breaking down from the wear and tear of being slumped over a computer screen for too many years. Oh, and we all start procreating like crazy.) Also, within the typical age range of undergraduate and graduate students, females have 150 percent higher insurance costs than males. Finally, Cronin claims that international students’ insurance costs are 20 to 25 percent lower than domestic student costs.

First of all, where do these statistics come from? Cronin does not provide a source. If these statistics are accurate, students might want to think about asking for additional health insurance options from the University. By requiring undergraduates to enroll in U-SHIP or have equivalent coverage, presumably the University is lowering or at least stabilizing costs for graduate students. That would appear to be an inference that Cronin makes in his article by pointing out the disparity in costs between undergraduates and graduates. Yet if that is the case, how much are the prices being lowered, if at all? Would the inclusion of more plans have any effect on price?

One option that has previously been discussed by the Student Health Insurance Review Committee (SHIRC) is a switch from a co-insurance plan to a co-pay plan. Under the current U-SHIP co-insurance plan, students pay a $200 deductible. After that deductible is met, students pay for 10 percent of additional in-network coverage. The U-SHIP plan is a Preferred Provider Organization (PPO), which means that subscribers receive discounts from the doctors and hospitals that are part of the network. Out-of-network care is covered as well, though only at 60 percent of its costs (as opposed to 90 percent for in-network care). If a co-pay plan were enacted, students would merely pay set fees for procedures as opposed to a percentage of costs. Though there would be a potential cost increase, the set fee’s element of co-pay plans simplifies costs for students.

All of this is not to say that we have a substandard health insurance plan. Unlike many other plans, U-SHIP covers preexisting conditions. The fact that it is a PPO gives students more flexibility in terms of choosing a primary care physician. Students only have to pay for 10 percent of in-network costs over the $200 deductible. United Healthcare is also able to negotiate discounts at the University Medical Center.

With new health care legislation on the horizon, SHIRC may have the opportunity to negotiate better rates with insurance companies and give students more competitive pricing options. However, to ensure that SHIRC understands the needs of the student body as a whole, more involvement is required on both sides. SHIRC holds a town hall meeting each spring, providing a forum for students to learn more about the U-SHIP and give some feedback. Students should make an effort to attend this meeting and demand better service or more options if they are unsatisfied with the current health insurance plan. SHIRC also surveys students regarding the health insurance plan. The most recent survey available on the Student Health Affairs Web site is from 2008. These surveys should increase in frequency. The Student Health Affairs Web site should also be updated. The current documents available under the “Background Materials” section of the site are outdated, as evidenced by the fact that Paul Cronin is an employee of the Chickering Group, a company that no longer provides health insurance to the University of Chicago. The University community could benefit from more recent statistics on the costs of providing insurance to students, and these numbers should come from our current provider, United Healthcare.

—Marshall Mundy is pursuing a degree with the Master of Arts program in Social Sciences.