Faculty could see changes to Health Care Policy
Employees and faculty at Utah State University could see a mid-year change made to the Health Care Policy due to the rise in health care costs and the deficit from the pervious year.
“The issue is that we have a high-quality health care package for faculty and staff at USU paired with rapidly rising costs,” said David Stephens, dean of the College of Business and chair of the Health Care Committee.
Every year the committee re-evaluates the health care plan and makes adjustments as needed, Stephens said. This year, changes may have to be more dramatic than in past years.
“We face it every year. We have to decide how we can balance the quality of health care benefits with ever-increasing costs,” Stephens said.
This year is different because the projected cost increase is about 14 percent for next year, Stephens said.
“With new diagnostic tests, drugs and improvements, the quality of health care and lifespans are increasing. These things are expensive to create and administer,” Stephens said.
With aging baby boomers in need of more health care and having squeezed all the excess out of the health care system during President Clinton’s administration, health care costs will continue to rise, according to an article from the Sept. 17 issue of BusinessWeek.
Also, last year the university decided to stop charging a payroll deduction for the premium because of good prospective, and costs ended up outweighing the revenues by $300,000, Stephens said.
This deficit and the increasing costs must be met by the employees because they are self-insured, which means that they don’t have a contract with an outside insurance company but share the risk among themselves, Stephens said.
“It gives us control over the internal design of the health care plan,” he said.
The legislature provides the bulk for the revenues for the health care plan, but will probably not increase their funding enough this next year to pay for all the increasing costs, Stephens said. The committee has heard the legislature is projecting a 12 percent increase.
“We only have a limited number of options,” Stephens said.
The committee must find a way to increase revenue or decrease costs, Stephens said. This means the committee can increase premiums or co-pays, or can reduce benefits.
“Any change will be helpful to some and not helpful to others,” Stephens said.
The university cash flow has been covering the debt so far, but eventually they will need to pay it, Stephens said.
The committee is looking for a way to “play catch up,” Stephens said. What will actually happen is yet to be determined, but it depends on how aggressively the committee takes action.
“You have to decide if you want to take some of your medicine now or take a large dose at the end of the year,” Stephens said.
The final change to the plan will be made around May or June, he said. The committee decides which actions they will present to the president and he makes the decision.
“We’re reviewing particularly high-cost parts of the program such as prescription drugs,” he said.
This year they will be making changes as they go, Stephens said.
“We don’t want the changes to be unduly burdensome to employees,” he said.
Another possibility they are looking at is making different plan options available, Stephens said. Employees could choose between a basic plan and a more comprehensive plan depending on their needs. Higher premiums would be charged for the more comprehensive plans.
“We’re in the study and evaluation phase,” Stephens said.
The committee’s next meeting is on Tuesday. Stephens said he would be surprised if any motions were made at this meeting. He said he doesn’t expect to see any major changes before the first of the year.
“It’s still early enough that we can make better decisions with more information,” Stephens said. “We want to make sure the system is doing the best it can for the most [people].”