UC Student Health Insurance Program Faces Deficit

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Balmore Ruano | New University

Students protest the UC’s response to the SHIP funding crisis, a $54 million deficit.

UC Irvine students and staff workers demonstrated outside Aldrich Hall last Tuesday morning to protest and bring awareness to several issues surrounding the UC Student Health Insurance Plan (SHIP).

Alliant Insurance Services, an actuarial firm that was hired by UC SHIP management, released a report on Jan. 11 that detailed the approximate $54 million deficit that UC SHIP accumulated during 2010-13.

The deficit is partially the result of miscalculations by the firm pricing benefits at too low of a premium.

The UC Office of the President (UCOP), which manages UC SHIP, has outlined several options to alleviate the deficit that include increasing premiums and cuts to available benefits under the policy.

Demonstrators at the rally on Tuesday held signs that condemned UC mismanagement and that students and workers should not bear the brunt of the consequences.

UAW 2865, a labor union representing Academic Student Employees (ASEs) across the nine UC campuses, organized the protest outside Aldrich, then moved inside the Student Center with members of Associated Graduated Students (AGS) for a meeting with representatives from the UC Office of the President, including those involved with UC SHIP.

Jessica Conte, a graduate student majoring in East Asian languages and literature, said the majority of questions were based on the exclusion of students from the decision-making process.

The Student Health Insurance Advisory Committees (SHIAC) UC-wide include undergraduate and graduate students and administrators at each campus, and it makes  recommendations regarding UC SHIP to the administration and UCOP. Despite its efforts, Conte said SHIAC had its shortcomings.

“One of the biggest problems with this is that this is a small group of representatives,” she said. “They’re volunteers, so they don’t have the resources to research what is needed.”

Conte also said that in previous dialogues, it was very difficult to get information from UC officials.

Tetsuro Namba, a graduate student majoring in comparative literature, echoed these difficulties and said the news of the deficit was a surprise only for students.

Courtesy of Jessica Pratt

“The deficit covers two and a half years,” Namba said. “It’s not like this is a surprise for [officials]. It’s been a developing problem, but it’s just that they didn’t tell student representatives.”

While UCOP officials have said they are open to student input, the options on the table are not very promising for students’ wallets.

1. The Lifetime Coverage Cap

The Patient Protection and Affordable Care Act, also known as ObamaCare, will go into effect on Jan. 1, 2014.

It will require all citizens to have a form of health insurance and prohibits insurance companies from placing lifetime coverage caps on insurance plans.

The insurance policies that are exempt from eliminating the lifetime cap are self-funded student plans, which fall under the “minimum essential standard” of care.

The UC, which switched to the self-funded system in 2011, is one of an estimated 30 U.S. college institutions that funds its student insurance plans. The university takes on the financial risk of medical claims and the self-funded model is considered cheaper and more customizable.

Protestors on Tuesday said they were “trapped” under lifetime caps to lifesaving care.

During the meeting with UCOP officials, the students said the “minimum essential care” qualification acted as a loophole for the UC and emphasized the situations of students who are close to, or have exceeded, the limit.

UAW 2865 began a petition in January to urge UC SHIP to lift the $400,000 lifetime coverage and $10,000 annual prescription drug coverage caps to match the requirements under the Affordable Care Act.

UC SHIP is not required to drop the lifetime caps, but officials have said they are looking into the feasibility of doing so.

2. Raising the Premium, Cutting Benefits

UC SHIP insures about 60 percent of undergraduates and 80 percent of graduates at UCI, with more than 130,000 students voluntarily enrolled system-wide. Undergraduates and graduates respectively pay $924.00 and $2088.00 per year (the UC-wide average premiums are $1,275 and $2,172 per year).

All UC students are required to be covered under an insurance policy and are automatically enrolled under UC SHIP. Students can opt out of UC SHIP after providing proof of an equal or better coverage.

However, some options on the table include making the opting out process more difficult, ensuring a lower cost throughout a larger population.

The report released by the consulting firm in January also recommends student premiums be increased by an average of 25 percent for the 2013-14 year.

Other options also include cutting services, such as dental and vision care, as well as reducing “unnecessary emergency room visits” and encouraging students to utilize UC facilities.

UC officials will make their final decisions about SHIP in mid-April. Until then, all options are on the table until specific ones are confirmed.