UC SHIP Premiums To Rise Next Year

Wednesday, March 27, 2013

Student heath insurance premiums will increase next year to prevent the UC Student Health Insurance Plan (UC SHIP) from falling further into debt. The shortfall in the plan is projected to be $57.4 million by the end of the 2013-2014 fiscal year.

The University of California’s Office of the President (UCOP) has proposed increasing student premiums at cumulative rates of 19.8 percent to 32.2 percent system-wide over the course of five years in order to close the deficit gap. UC SHIP is a student-funded insurance plan that delivers health benefits to each of the ten campuses. Each campus collects a premium from students and sends them to UCOP, which is then billed by outside service providers.

Insurance premiums for a single UCSF grad student would rise from $692 to $814 per quarter if nothing else in the plan changes, according to Student Health and Counseling (SHC) Director Adele Anfinson.

Students speak out

While the mounting deficit will not be added to student premiums in the 2013-2014 academic year, students in the future may be called upon to pay down the debt, Anfinson warned at an open meeting of the Student Health Advisory Committee (SHAC) on March 14.

The UC Students Association (UCSA), representing all UC students, has issued a statement rejecting any UC proposal that places the burden of repaying the debt on the students. “Students strongly oppose the options that pass the debt directly onto students, and we demand that the UCOP pay for the debt with emergency or discretionary funds,” said UCSA President Raquel Morales, a fourth-year UC San Diego student. “Every effort should be made to maintain the affordability of the UC Student Health Insurance Program.”

UCOP is taking legal action against Aon Hewitt, the actuary insurance company that allegedly made the financial miscalculations, setting the student premiums too low, which led to the deficit. The firm was effectively fired July 2012 and replaced with Alliant Insurance, the firm that calculated the deficit earlier this year.

Pressure to remove pharmacy/medical caps

With the increase in student premiums, students have also raised concerns over how to assign these increases and whether to add an additional estimated $37 per student per year to remove annual pharmacy and lifetime medical caps. 

Shanni Silberberg, a SHIP Advisory Board member and UCSF Neuroscience student, said the restructuring discussions present “an opportunity to even out premiums … and make changes [to the plan]” that would fulfill the needs of all students covered.

Silberberg reported overwhelming support for removal of both the pharmacy and lifetime medical caps — particularly at the graduate level — citing ethical concerns about retaining the caps. Polls taken this month at the board meetings of the Associated Students of UCSF (ASUC) and Graduate Student Association (GSA) reflected similar support from UCSF students. 

Silberberg noted that such limits are illegal under the Affordable Care Act (ACA), better known as Obamacare, and that UC SHIP is only exempt because it is a self-funded plan that does not rely on an insurance company to take on financial risk. 

In the UCSA press release, UCSA President Morales declared, “it is unacceptable and shocking that our University would abandon students that find themselves under incredibly unfortunate medical circumstances.” 

AB 314 moves forward

Kenya Wheeler, a UC Berkeley graduate student, experienced this firsthand when his cancer diagnosis left him nearly bankrupt.  “When I was diagnosed with lymphoma in my brain, I didn’t know the UC Insurance plan has an annual prescription limit of $10,000 and a lifetime medical care limit of $400,000,” Wheeler said in a statement issued on March 19, following State Capitol hearings on legislation aiming to protect students from these health care limits.

AB 314, sponsored by Assembly member Richard Pan (D-Sacramento), will prevent UC SHIP from imposing the pharmacy and medical caps that left Wheeler to fend for himself when he most needed medical care.

The bill “empower[s] students to ensure that the institutions governing their education and health care are working for them,” said Pan.  AB 314 has since passed to the Assembly Appropriations Committee. 

Benefit levels and co-pay issues

Another insurance plan restructuring issue on the table is whether to keep all benefits.  One of these is voluntary leave and dependent coverage.  Again, graduate-level students at all campuses were supportive of keeping both for philosophical reasons.  “It’s the students who have to leave for medical reasons, the students who have families and no other medical options … who need our support,” explained Anfinson at the March 14 SHAC meeting.

The majority of both graduate and professional students also supported increasing annual premiums rather than increasing co-pays. The unexpected cost of co-pays for simple blood work are “already crippling,” protested Justin Becerra, a second-year dental student and SHAC representative.  Furthermore, professional student premiums may be covered by scholarships, and graduate student premiums are covered by their Principal Investigators (PIs).  Graduate students, however, are taxed on their health insurance premiums, as Erin Oswald, a second-year Biomedical Sciences student, pointed out.

The only benefit reduction that may significantly decrease premiums (by about 3%) is the possible addition of a $50 co-pay for MRIs and CT scans, which would be waived for diagnoses such as cancer.

Which campuses will pay more?

Of particular concern to UCSF is how premium increases will be assigned to each campus.  UCSF is responsible for only 2.5% of the deficit, but may have a higher premium increase than schools more responsible for the debt.

Anfinson explained that this is because schools have been divided into low, medium, and high bands, referring to the percentage of premium increase.  UCSF is in the low band, but because its subscribers already pay the highest premiums, the dollar amount they pay may be higher than that of a school in the medium band. 

SHAC members stressed that it is not too late for students to voice their opinions on the potentially life-altering decisions ahead.  SHC sent a survey to all UCSF students on March 20 requesting feedback. 

UCOP has given the UC SHIP advisory committee a deadline of April 1 to come up with recommendations for each campus. Ultimately, the Council of Chancellors from the UC system will decide by June 1 whether to implement an alternative student health insurance plan or stay with UC SHIP.