Chancellors Approve Changes to Student Health Insurance Plan

The UC Chancellors approved a list of recommendations to the UC Student Health Insurance Program (SHIP) put forth by the UC SHIP Advisory Board last Wednesday, May 1 at their regularly scheduled meeting in Oakland.

The SHIP Advisory Board recommends to the SHIP Executive Committee, which then forwards the recommendations to the Council of Chancellors (COC).

UC SHIP is a self-funded model, which means the University of California assumes all risk. The model is supported solely by the premiums paid by students. Opposite the self-funded model is the fully-funded plan, where the insurance company takes on all risk, collects the premiums and pays the health care claims based on the benefits of the plan.

SHIP faces a deficit projected at $57 million accrued from the plan’s inception in 2010 up into 2013. The deficit is partially the result of miscalculations by the managing firm setting premiums too low to match the benefits.

Vice Chancellor of Student Affairs Thomas A. Parham, who also chairs the UC SHIP Advisory Board, said the deficit is momentarily “in limbo,” as the Council of Chancellors decided to leave the deficit out of the discussion. Premiums will not be included as a possible source for recouping the deficit, and other options are being considered.

“It was the consensus of the committee, and [the Office of the President] agreed, that in this coming 2013-14 year, we would not deal with the deficit,” Parham said. “Our discussions were relegated to simply looking at the plan, exploring the benefits, trying to set the appropriate premium, then recommending the plan going forward.”

Caps on lifetime maximum, pharmacy and other essential health benefits have been removed, a decision based on widespread student input. Although the Affordable Care Act (Obamacare) allows an exemption for self-funded health insurance models like UC SHIP to set caps on benefits, the committee and chancellors agreed to remove all caps.

The chancellors also confirmed that campuses will have the choice to remain with UC SHIP or provide comparable coverage through another insurer. Berkeley is the only campus leaving UC SHIP completely, while other campuses either chose to stay in the program or keep only a few benefits of the medical plan.

UC Irvine graduates will remain in UC SHIP, while undergraduates will move to a third-party insurer but keep dental and vision care provided by UC SHIP.

“Each of the campuses were so fed up with the way the program had been run by UCOP,” Parham said. “To me, [that was] the best decision to make on the behalf of the students … it’s a cheaper plan for the students.”

He projected the annual premium for undergraduates under the new insurer at around $1,034, a $28 increase to the $1,006 per year under UC SHIP. Despite the increase, Parham said this option would be cheaper for undergraduates in the long run as the debt could increase and be placed on the students.

Graduate students, he continued, have a higher claim and utilization history than undergraduates, and the UC SHIP plan offered a cheaper option — around $2,300 as opposed to above $3,000 under the third-party.

Students are not mandated to purchase coverage from the university; however, they are required to have a form of health insurance. Students can waive out of the plan provided by the university if they can demonstrate having a comparable or better plan.