Student Health Insurance Representatives Meeting November 21 2005

Student Health Insurance Representatives Meeting November 21, 2005

Problems • Duke Plan health insurance premiums have increased at annual rates of 18%, 23%, and 21% for the last 3 years • These rates exceed all other components of the cost of education and cost of living at Duke • A 20% increase for 2006 -2007 would mean a premium of $1907, not including the Student Health Services annual fee ($524+ plus summer). • Family Plan requires premium subsidy by single students, and does not accommodate all sizes of families

Result • Burdensome costs for students on Duke’s Plan are becoming overwhelming • Some healthy students seek lower cost insurance in private market, driving up average utilization per student on Duke Plan • Frequency of underinsurance increasing • Duke is less attractive to prospective students compared to peer institutions with better health insurance support

GPSC’s Actions: Internal • Develop internal structure within GPSC to address health insurance annually with continuity • Create standing subcommittee featuring leadership cultivation and strong presence on Student Health Services’ Student Health Insurance Advisory Committee (SHIAC) • Improve information exchange with students • Leverage Young Trustee to coordinate BOT subcommittee representatives to address issue at Feb meeting in unified manner

GPSC’s Actions: External • Work closely with Deans, Student Affairs and Student Health Services to communicate our values, objectives and proposals and provide feedback on their ideas • Memorandum to Board of Trustees to elevate awareness of health insurance as critically important to students – Statement of Our Values Regarding Health Insurance • These values will guide our decision-making around proposals for achieving our objectives – Statement of Our Immediate and Long Term Objectives • Approval of GSAS plan to subsidize health insurance for all doctoral students • Incorporate discussion of health insurance costs into ongoing strategic planning for Financial Aid Campaign • Plan for institutional coverage of health insurance for all graduate and professional students – Offer Proposals for Achieving Our Objectives

Timeline – November 21: Meeting with GPSC Representatives – November XX: Obtain feedback on issues from GPSC Representatives – December XX: Update to GPSC Representatives on Values, Objectives and Proposals – January XX: GPSC representative approval of memorandum to BOT – February 10: Submit memorandum to Deans, Student Affairs and Student Health Services – February 24: BOT Meeting with presentation to Student Affairs Subcommittee

Four Principle Issues • We need feedback from Representatives on these issues to help shape our statement of values on health insurance: 1) Optimizing Utilization 2) Family Subsidy 3) Participation 4) Institutional Support

Issue 1: Optimizing Utilization Question: what are most effective and tolerable methods for controlling rate of health insurance premium increases through utilization and keep our campus’s healthiest members in the Duke plan? • Increase brand name drug co-pays? Reduce drug formulary? • Add emergency room visit co-pay? • Increase annual deductible? • Cover all family utilization at specific clinic? • Closely case-manage historically high users?

Issue 2: Family Subsidy Single Family Utilization $757 $4773 Premium $1063 $2282 Subsidy 62% * Assuming that claims equal 80% of "true" premium, this means that the premium for families should have been $5966. 25 for families in 2003 -2004, but their premium was only $2282, meaning that 62% of their premium was paid by single students

Issue 2: Family Subsidy Question: What is the appropriate level of subsidy of Family Plan premiums by Single Person Plan premiums? Who should pay subsidy? • 59% (current)? 25%? 0%? • Single students? University?

Issue 3: Participation Question: Should we mandate participation in the student health insurance plan by all students? Some students? • Address underinsurance issue? • Lower premiums by improving average utilization per student? • Affect autonomy?

Issue 4: Institutional Support Question: How can Duke move toward covering health insurance costs for all students? • Endowed funds? • Other models? Self-insurance? • What should be covered first, e. g. , doctoral students, family subsidy?

Feedback • • Email comments? Send out email reminder? Online survey? By what date? (See Timeline) – Need time for them to collect opinions

Contact Information • For additional comments or questions, please contact: • Justin Klein – (617) 529 -1243 – Justin. klein@duke. edu • Megan Mc. Crudden – (XXX) XXX-XXXX – Megan. mccrudden@duke. edu • Eric Vance – (XXX) XXX-XXXX – Eric. vance@duke. edu