$57 million deficit detected in UC student health insurance

Many University of California campuses plan to withdraw from the UC Student Health Insurance Plan, after a $57 million deficit was detected in the UC Health Insurance Plan (UC SHIP) .

This decision was made after the Council of Chancellors, including UC Davis chancellor Linda P.B. Katehi, met yesterday and endorsed the move. Other UC representatives were present, as well.

The deficit has been accumulating since 2010. According to Todd Atwood, Insurance Services supervisor at UC Davis, the deficit occurred because of several factors, including not implementing proposed increases to premiums, utilization of the plan increasing and monthly monitoring of the plan was not done to the level that it had previously.

The UC SHIP director at UC Office of the President (UCOP), Heather Pineda, was responsible for day-to-day managing of the plan in association with the consultant firm, AonHewitt, according to Atwood. In January 2013, it was decided that AonHewitt was no longer providing services to UC SHIP and a new firm was hired.

“It was a decision not to increase the UC SHIP premium by more than 10 percent due to other cost increases to students. UC Davis experience showed that our increase should have been at least 18-20 percent for the 2012-13 year, but was capped at less than 10 percent by UCOP,” said Atwood.

ASUCD is currently defining a repayment plan for the current deficit and is attempting to establish a defined plan for management of future deficits and surpluses, as well, according to Bradley Bottoms, ASUCD Vice President.

“It is frustrating that UCOP is making such huge mistakes that are directly affecting students at each campus. Because this is obviously a mistake made by UC leadership, the losses should not be passed down to students. We now have to look at two issues, how we are going to pay off the deficit with low student impact and figure out how we can provide a better, more stable insurance policy to the students at our campus,” said Bottoms.


— Natasha Qabazard

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