UC schools show concerns over insurance plan

Multiple University of California campuses proposed pulling out of the UC Student Health Insurance Plan at the UC SHIP Advisory Board meeting, because of concerns about the plan’s long-term viability.

The plan currently faces a multi-million dollar deficit, which has sparked concerns among campuses about the UC Office of the President’s management of UC SHIP.

Campuses discuss alternatives

The plan’s deficit stems from originally setting the premium costs too low for past plan years, rates the UC said were set based on advice from the consulting firm Aon Hewitt. The UC is currently taking “legal action” against Aon Hewitt, and has not disclosed information about the lawsuit, according to Daily Bruin archives.

The UC SHIP Advisory Board met on Wednesday to finalize recommendations – both systemwide and campus-specific – to the UC SHIP executive steering committee, a part of the UC Office of the President. The advisory board is comprised of representatives from the different UC campuses.

The UC has discussed increasing premiums on the plan to help pay for the deficit. The proposed increases are not meant to address the cumulative $57 million deficit that UC SHIP has accumulated since it started in 2010. The increases’ purpose is to get the plan to break even, so the plan does not continue to lose money, said Scott Arno, a graduate student in neuroscience and a member of the UC SHIP Advisory Board.

While UCLA’s undergraduate student government does not plan to urge the university to pull out of UC SHIP, representatives to the advisory board from UC Berkeley, UC Davis and UC Riverside are recommending their campuses withdraw from the plan entirely, Arno said in an email statement.

UCLA may reconsider its position on the plan if other campuses’ withdrawals raises premiums by a significant amount, said David Zeke, president of the UCLA Graduate Student Association.

Additionally, representatives from UC Santa Barbara and UC Irvine have recommended to remove the undergraduate UC SHIP coverage while keeping their graduate insurance, he added.

Campuses started discussing taking themselves out of the plan after questions about its financial mismanagement in recent months. The ramifications of withdrawing from the plan are unclear, since discussions are in a preliminary stage.

Bahar Navab, president of the UC Berkeley Graduate Assembly and member of the UC SHIP Advisory Board, helped to initiate an unofficial straw poll of senators at the Associated Students of the UC – Berkeley’s student government. She found wide support from the senators for removal of UC Berkeley from the plan.

“(The UC) has poorly managed the UC SHIP plan to date and we have seen no indication of improvements or effective long-term solutions to the plan’s current problems,” Navab said in an email statement. “There is no guarantee that our students will not be asked to subsidize other campuses in future years, especially with regards to paying off the existing deficit.”

She said UC Berkeley’s Student Health Advisory Committee is weighing other health care options as well.

The Undergraduate Students Association Council at UCLA has also been discussing the ramifications of the premium rate increases and UC SHIP’s continuing deficit.

USAC President David Bocarsly said the general consensus of USAC, however, is that even with the potential premium increases, the insurance plan is still a good option for student health care.

Bocarsly added, however, that he thinks the costs for the accumulated debt should be paid for by the UC because of their role in the financial mismanagement of the plan.

Some students said they were concerned about the potential increase in premium costs.

Andrea Guzman, a third-year English student at UCLA, said UC SHIP was her only viable plan for health care after her father’s employment health insurance stopped covering her. Guzman said she thinks proposed premium rate increases would make it hard for students like her to afford the health care they need.

Smoothing out the burden

One of the suggested ways to address the deficit was a process called “smoothing,” in which payment for the UC SHIP deficit would be more evenly distributed among the campuses.

But recently, members of the UC SHIP Advisory Board argued against the smoothing approach of paying for the deficit, Arno said.

The smoothing approach would have spread the cost around the other campuses instead of having it centered in a few high-debt campuses, Arno said.

Arno said the move away from smoothing is one of the reasons for the lower-than-expected rate increases.

As it stands now, the advisory board is leaning toward recommending a “pay-your-own” deficit approach for each campus, where each campus pays its own share, he said.

This would lead to undergraduate health insurance premium increases of about 12.5 percent at UCLA and graduate increases of about 17.9 percent – lower than the expected increases under smoothing.

The proposed increases would take into account the removal of lifetime benefit and annual pharmacy caps, Arno added.

Many UC students have strongly advocated for the removal of the caps. Legislation to remove the caps is currently circulating in the state legislature.

Plan’s future remains unclear

As discussions regarding UC SHIP’s future continue, UC spokeswoman Brooke Converse said it is important to remember that the proposed premium increases and withdrawals have not yet been approved by the chancellors, and next year’s insurance plan has not been finalized.

Campus chancellors will get to make the final decision for each campus on whether or not to pull out of the plan, UC officials said.

The council of chancellors plans to meet and receive the executive steering committee’s recommendations on the plan at its meeting on May 1, Converse said.