Insurance hike kept to 21.9%

Rising health insurance costs have given Duke students a headache in recent years--but at least premiums won't be as expensive next year as students anticipated about a month ago.

  During meetings of the University's Health Insurance Advisory Committee in early April, representatives from Blue Cross/Blue Shield of North Carolina announced that premiums will increase next year by 21.9 percent, rather than 27.8 percent, the figure projected at an HIAC meeting in March. The lower rate has received the final stamp of approval from the Office of Student Affairs.

  The announcement came after members of HIAC looked into less expensive health insurance options. Out of the 18 companies HIAC contacted, however, only three replied. The amount of money students would have saved from switching to those companies would have been minimal, said Rob Saunders, a member of HIAC and president of the Graduate and Professional Student Council.

  Some committee members attribute the lower percentage increase to the negative feedback from students at the earlier HIAC meeting and to the fact that researching other options provoked BC/BS to lower its rates to maintain its relationship with Duke.

  Although yearly premiums will increase from $1,063 to $1,310, the rate is more consistent with inflation within the health insurance industry than the original projected rate increase. HIAC members sought to add dental and optical coverage to the plan as well, but only optical coverage was added, for a charge of $14 more per year. Despite the rising costs, HIAC chose not to cut any benefits.

  "Clearly, any increase less than 28 percent is good news, but I wish it had been a lot less" Saunders said. "Unfortunately it's a nationwide trend, and the number of reasons behind this are unfixable from the student level."

  BC/BS spokesperson Mark Spinneford said the original rate increase had been calculated based on projected costs of insuring Duke students based on recent trends, but a reevaluation of those projections resulted in the adjusted rate.

  "[Duke students] are a group for whom the medical costs and use of services, including some costly services, is higher than typical customers in our plans," he said. "Total costs we paid for the group are up 17 percent between 2002 and 2003."

  However, Jean Hanson, assistant director of student health and a member of HIAC, said the original rate BC/BS calculated over-emphasized a spike in hospital visits near the end of the school year. This could have affected the projected trends of hospital visits and thus inflated projected costs, resulting in the high projected increase of 27.8 percent, she said.

  "Our argument is that in July a lot of the students use their insurance before they go off of it," Hanson said. "When they go on to more schooling or a job [and] they get new insurance, they take the opportunity to use that insurance, so we see a spike in July which is not really indicative of a calendar's worth of claims."

Spinneford added that the lower percent increase means a riskier year for BC/BS profit-wise.

  "[The original rate of 27.8 percent] was based on a projection of what we expected the health costs to be in the coming year," he said. "[With the rate of 21.9 percent] we had some more current data and frankly took a little more risk that the costs will moderate more than we expected them to originally."

  The HIAC will continue to research other options next year in order to make sure the BC/BS rates are competitive with the rest of the industry, Saunders said.