UCLA students on the University of California Student Health Insurance Plan may see premium hikes of about 20 percent in the next school year to help pay for an estimated $57 million deficit on the plan, depending on final decisions made by campus chancellors later this year.
The deficit is the result of premium rates that were set too low to cover student health care costs, said Brooke Converse, University of California spokeswoman.
The premium rates were recommended by Aon Hewitt, a consulting firm hired by the UC to set the rates, Converse said. It is unclear whether the firm was responsible for the miscalculations, she added.
A press release from the UCLA Student Health Advisory Committee, which provides recommendations to the UCLA Office of the Assistant Vice Chancellor for Student Development and Health, said the UC is taking “legal action” against Aon Hewitt. Converse, however, said she was not allowed to comment on the proceedings at the time. The firm was not available for comment by press deadline.
She said the UC is currently discussing multiple options to make up the cost of the deficit, including raising the prices of premiums for students.
One suggestion is a seven-year system in which rates will be raised at UCLA by around 20 percent every year for the next seven years, said Scott Arno, a graduate student in the neuroscience department, member of the committee and a UCLA representative on the UC SHIP advisory committee.
Arno said the UC is also discussing raising copays and deductibles in an attempt to save money and lessen the effect of the premium hikes. Raising copays and deductibles would also save enough money to remove the lifetime benefit caps and annual pharmacy caps at the UC.
Premium hikes are likely to affect financial aid awards, Converse said.
The proposed changes have garnered negative reactions from some student leaders on campus.
On Tuesday, a group of UCLA students and workers from the UC Student-Workers Union held a march to protest the proposed rise in premiums as well as existing lifetime benefit caps for students on UC SHIP.
The UCLA Student Health Advisory Committee is made up of UCLA students and advocates for UCLA students in the development of health care policies and programs, according to their website.
Arno said there was already a feeling of skepticism at the low level of the rates when UCLA joined the plan in 2011. But the Office of the President put strong pressure on the campuses to join the plan, he said.
Though he acknowledges that the UC will need to make adjustments to cover for the $57 million deficit, he said he thinks the money should not come out of students’ pockets.
Regardless of whether or not the UC SHIP premiums change, many students said they would not opt out of the plan.
Yun Liang, a first-year business economics international student from Taiwan, said UC SHIP is her best option, even if there is a fee hike.
“I have no choice but to use UC SHIP, because, as an international student, other medical insurances are much more expensive and less accessible,” Liang said. “So, even with the premium hike, I have to continue with it.”
Ronald Johnson, director of financial aid at UCLA, said the Financial Aid Office will try to cover as much as possible, but students may have to take out loans if premiums rise significantly.
“UC SHIP decisions should ideally be made before final financial aid offers are sent out in late May,” Johnson said. “If not, we will have to repackage (aid) for everyone.”
Charmian Wong, a fourth-year microbiology, immunology and molecular genetics student, currently receives financial aid, which covers her student health insurance, but still needs additional loans to complement the aid. Wong would still prefer a raise in premiums to a cut in coverage.
“I think it’s pretty worth it so far. It’s better to be insured,” she said. “If you get into a serious accident, this is going to save you a lot of money.”
Both Converse and Arno said a reduction in benefits is not likely and the more probable course of action is a raise in premium rates. Arno added, however, that UC SHIP provides better benefits at lower prices than the fully funded Anthem Blue Cross health care plan that UCLA was on formerly.
“I want to really emphasize that we are better off this year, even with the rate hike, than we would have been on our old plan,” Arno said.
Leaders of the UCLA Student Health Advisory Committee are currently looking for suggestions and comments by students to propose to the UC-wide UC SHIP Advisory Committee, which will then make a formal proposal to the UC Office of the President, he said.
But the chancellors from each campus have the final say on the issue, Converse said.
She said the UC expects a decision on the extent of premium hikes and possible benefit cuts by June 1, to prepare for the 2013-2014 academic year.
Email Kevin Truong at ktruong@media.ucla.edu and Emily Liu at eliu@media.ucla.edu