Health insurance offered by the University will cost almost $150 more
By Rosemary Peters
While being a full-time student and involved in clubs ranging from business fraternities to ASUP Senate, freshman Sarah Klemz doesn't have much free time. However, she has made it her responsibility to get a job in order to help ease her parents' financial load.
"Part of being in college is learning to be independent," Klemz said. "I feel like part of this independence is learning to take responsibilities for my own finances so that I don't always have to rely on my parents. I know how hard they work in order to send me to UP."
Next year, her parents' financial load, as well approximately 12 percent of the school's population, is going to get heavier with a 16.1 percent increase in health insurance costs.
"The policies have gone sky high," said Student Account Specialist Kathy Ackley.
According to Ackley, students will have to pay $1,056 for health insurance for the 2009-2010 school.
This is a $146 increase from the $910 that students paid for health insurance this year.
"We are not immune to health insurance increases," Director of Human Resources Jim Kuffner said. "Many of these increases are largely out of our control."
As Director of Human Resources, Kuffner works closely with UP's benefit broker USI Northwest and Kaiser Permanente in order to offer students and employees the best possible options for their health care. Currently, UP's health insurance provider is Aetna Health Insurance.
According to Ty Oliver, who is among several brokers who works on UP's account at USI Northwest, there are many reasons that health insurance premiums increase, but one of the main reasons for this year's rise is in response to the economy.
"Because fewer people have jobs, fewer people are buying health insurance programs; however, this doesn't stop people from going in for care when they are sick or injured. It is known as 'uncompensated care' when people cannot pay their bill," Oliver said. "This cost of uncompensated care is spread among people who can pay, and this is a reason health insurance premiums go up."
With the economy in its current state, Oliver expects to see fewer people with health insurance, but this does not mean claims will go down. In fact, health insurance premiums are on the rise around the country.
"With the economy being as it is, college is already expensive enough without having to worry about finding money to pay for health insurance," prospective student Kristen Senyk said.
Paul Myers, the Health Services Director in the Health Center who helps make decisions about the insurance plan, says that there are two other significant reasons that health insurance costs are on the rise.
"The one fundamental engine for the rate increase is the meta-analysis that the insurance underwriters use to estimate the average increase in health care costs for the region in the coming year," Myers said.
In this analysis, underwriters, who decide if insurance is provided and under what terms, look at several factors.
According to Myers, rate increases for the upcoming year were driven by a significant increase in student utilization of service providers who are outside of the preferred provider network and by students increasing their use of brand name pharmaceuticals as opposed to generic pharmaceuticals.
The rate increase was also affected by random misfortune.
"About every four years or so, we will experience more insurance claims than we had averaged in the prior three years or so," Myers said. "Whenever this happens, the insurance underwriters use the claims experience to justify raising the premiums on the next year's plan."
Myers said that the second major cause for the higher premium is due to the risk pooling process. This risk pool is based mainly on the number of people the health insurance will cover. UP's risk pool is made up of approximately 12 percent of the student body.
"This smaller risk pool tends to cause the underwriters to feel there is greater risk all the money could be spent (which will reduce their profit margin) and so they will want to increase the premium per person to try to assure a workable margin," Myers said. "Thus, within certain parameters, the larger risk pools can bring down the premium per person to some degree."
Myers stated that the school has approved modifications in this coming year to try to keep the subsequent year's premiums from going too high. One modification deals with network providers.
The in-network providers are the preferred network because they keep costs lower. This in turn makes insurance companies willing to pay more of the student's costs.
A second modification the school is looking at involves the attributes of the health insurance plan.
These attributes include considering a higher deductible and co-pay, limiting expensive items or cutting out frequently used services in order to drive the premium down.
"On the flip side of each of those coins is that some student won't have as much benefit, or coverage when they are in a time of need," Myers said. "This is the challenge. Do the students prefer to pay more now, or pay more later?"
Although UP students cannot affect things such as the economy and the risk pooling process in order to reduce their health insurance costs, Myers offers suggestions on activities students can take in order to help lower their own health care costs.
"Don't drink alcohol to the point of intoxication as this leads to accidents, injuries and sexual risk taking," Myers said. "Don't engage in risk taking behaviors relative to sexual activity or drug use. If it takes someone to dare you to do it, it's probably not a good idea, so don't do it."
Myers also suggests to students who want to avoid getting sick to stop smoking, eat right, sleep better, wash their hands frequently and avoid touching their eyes with unwashed hands. If a student does get sick, it is also beneficial to ask for generic pharmaceuticals when getting prescriptions filled.
"There are many lifestyle choices that people can put into practice in their lives in order to stay healthy," Senyk said. "And if this will keep health insurance prices down, then I think students should implement them."
To students who want to avoid physical accidents, Myers stresses the importance of everyday small activities from wearing helmets and protective gear while riding a skateboard to buckling seatbelts.
"Every claim made draws from the same pool of money and it is a finite amount of money. Insurance is there for a reason, and people should use it if they need it," Myers said. "The point is to make wiser decisions to reduce the probability that you would need it. It will not only keep your costs down, but it will keep others' insurance costs down as well."
