Students may soon have to opt out of receiving insurance coverage through the university if a proposal to change the current Student Health Insurance Program is passed.
University Health Services director Ferdinand Schlapper spoke before United Council today, hoping to gain support for an opt-out student health-insurance program as opposed to the current method of offering optional insurance to students at an additional cost.
The Associated Students of Madison recently passed a bill supporting the implementation of an opt-out plan. Several representatives from ASM, along with the Student Health Insurance Advisory Committee, met with UW administrators last week to ask for support for the bill and to discuss options concerning the future of student health insurance programs on campus.
Vice chair of the Student Health Insurance Advisory Committee, Dinesh Rao, said he was pleased with the meeting.
“The meeting went well,” Rao said, “I am very hopeful that by the fall of 2002 we will have a new insurance system in place.”
Rao, along with ASM representative Jeff Pertl, sponsored the bill.
The Student Health Insurance Enrollment Bill advocates an improved, more cost-efficient, student insurance program.
The Health Advisory Committee is considering a program where a student’s tuition bill would automatically include the insurance cost. Students would then be allowed to decline the coverage by opting out and paying the remainder of the tuition.
A briefing prepared by UHS said, “Voluntary enrollment systems draw less than 5 percent participation rates, leading to strong adverse selection and bad risk pools, which result in dramatically increased insurance premiums, restrictive benefit packages and further decline in participation rates. UW-Madison students are currently facing this scenario.”
Pertl said he agrees.
“Our current problem is that [the current opt-in system, SHIP] will go bankrupt in the next few years,” Pertl said. SHIP recently reduced the overall benefits package — while increasing premiums — as a result of this problem. In the 2000-01 plan there was no deductible, and maximum out-of-pocket expenses could total $1,000 for a single person, and $2,000 for a family. By the 2001-02 school year, the deductible had risen to $300 single/$600 family, and maximum out-of-pocket expenses had doubled. However, Pertl said these cost increases were not as bad as they could have been.
“We had to get a whole new insurance carrier for SHIP for this year, ” Pertl said. “Otherwise, the rates would have tripled.”
Student Health Insurance Advisory Committee member Andrew Bryan says this is the beginning of a “downward spiral” for the SHIP Program.
“By next fall, prices could be going up again,” Bryan said. “It’s important that we get an opt-out program on this campus.”
