Is UC SHIP Sinking?

Student health plan incurred $57 million debt over three years

Over the past three years, the University of Califrnia Student Health Insurance Plan (UC SHIP) incurred a large deficit, projected to reach approximately  $57 million by the end of the 2012-13 plan year.

A small but impassioned group of UCSF students and staff gathered on March 7 to discuss the recently disclosed insurance crisis and its impact on students at UCSF.

Shanni Silberberg , a member of the UCSF Student Health Advisory Committee (SHAC) and neuroscience graduate student, explained that UC SHIP was established in 2010 as a nonprofit insurance plan for undergraduate and graduate students on all UC campuses. Instead of involving an insurance company, the premiums that were collected from students were used to pay claims.

Eliminating an intermediary allowed for low pricing of premiums, but the prices were set far too low, due to allegedly inaccurate claims projections by the consultants AonHewitt. As a result, UC SHIP has incurred a massive deficit over three years. 

Now, premiums must be increased to avoid further debt, and the incurred debt must also be paid back. The UCSF SHAC aims to minimize the premium increase and retain benefits for students.

Importantly, they committee hopes to prevent the Office of the President (UCOP) from adding the prior debt to students’ premiums.

The SHAC states that it “[does] not believe it is appropriate for future students to pay the bills of those who have left … because of underfunded premiums that should have been apparent much earlier.” A $57 million debt translates to a $400 increase per student.<per year or what period?>

It was further noted that the deficit is not distributed evenly across all campuses. According to Dr. Joseph Castro, Vice Chancellor of Student Affairs, “61% of the deficit … was attributed to UCs Davis, Irvine and San Diego. UCSF accounted for [only] 2.5% of the projected deficit.” UCSF students currently pay much higher premiums ($2,766 a year), compared to students at larger campuses such as UCSD ($1,782 a year).

What’s the solution?  UCOP is taking legal action against AonHewitt to recover losses. But they have not eliminated the possibility of adding the deficit to our premium increases.  Immediate action must also be taken to prevent future debt. 

The most practical solutions are to increase premiums and adjust the plan structure, which includes premiums, benefits, management and co-pays.  But how?

Silberberg stressed that we must consider our values. Are we willing to pay $4,000 year to recover the funds lost by UC? What about $3,200 a year to keep all benefits? Can we minimize increases without sacrificing care?

A student at the forum suggested aggressive negotiation with UC medical centers, where UC students are most often referred.  Several others present emphatically agreed, saying: “We want to know that our medical center, that we invest so much of ourselves into, is there to support us.”<Any names we could give here?>

Suggested changes to the plan benefits included increasing co-pays to slightly offset increases in premiums. Silberberg brought up the possibility of increasing the $100 emergency room co-pay, for instance, since that is generally an infrequent occurrence. 

Another option was the addition of a $100 co-pay for MRIs and CT scans, but students objected that an accident or prolonged illness could necessitate several scans in a short period. 

Carrie Schiff, a nurse practitioner student, explained that even with a “less expensive chronic condition” such as diabetes, in-network co-pays are already $200 a month, and that does not account for an unexpected illness. 

Students at the forum agreed that benefits must be retained, particularly since their elimination will not result in significantly lower premiums.  Dependent coverage and leave-of-absence coverage, for instance, do not affect the majority of UC students. But, as some argued, they are critically important for the individuals who do require this benefit. 

Quite apart from the deficit, attendees at the meeting also voted for removal of the annual pharmacy and lifetime medical caps, which will cost an additional $30 a month.  Currently, UC SHIP members have a $10,000 maximum pharmacy benefit per year, and the lifetime maximum is $400,000. 

Many students argued vehemently for a removal of both of these caps, citing the pharmaceutical expenses of chronic illnesses such as diabetes, lupus or rheumatoid arthritis. Insulin test strips alone are $1.23 per strip, and diabetic patients such as Schiff test at least 8-15 times per day.

The rheumatoid arthritis drug Enbrel costs up to $1,903 a month. The lifetime medical maximum, according to providers, would barely cover an unexpected cancer diagnosis or prolonged hospitalization.

“UCSF students with chronic and mental health needs … struggle with health expenses,” said Kate Darling, a doctoral candidate in sociology, adding that questions about whether or not these students can access health care “reflect the values of our campus community.”

The UC SHIP Advisory Board will meet on March 22 to formulate a plan for the future of UC SHIP. The final deadline for making financial changes to the program for the 2013-14 year is April 1.

As Dr. Susan Rosen, SHC primary care provider, emphasized during the forum, “Stay tuned. Thousands of student voices will make a difference.” 

Please send suggestions to your UCSF SHAC representatives:

Iveta Markova/ASUCSF iveta.markova@ucsf.edu

Nancy Chang/GSA nancy.chang@ucsf.edu

Shanni Silberberg/Division shanni.silberberg@ucsf.edu

Justin Becerra/Dentistry justin.becerra@ucsf.edu

Radka Varimezova/Dentistry radka.varimezova@ucsf.edu

Amy Heinzerling/Medicine amy.heinzerling@ucsf.edu

Harjus Birk/Medicine harjus.birk@ucsf.edu

Elda Kong/Nursing elda.kong@ucsf.edu

William Do/Pharmacy william.do@ucsf.edu

Kamelia Ghazi/Pharmacy kamelia.ghazi@ucsf.edu