Health insurance costs are on the rise for certain Penn students

For the small group of Penn students who seek medical insurance from the University itself, an increase in premiums and a decrease in benefits is not the best way to start a new academic year.

But that is exactly what these 7,000 or so students have been faced with for the fall.

The Penn Student Insurance Plan -- which offers three premiums -- will be raising prices on one of the three, with fewer benefits as part of the deal.

The change ultimately affects students covered by PSIP who do not have a spouse or family. While the rate for a student with a spouse or one dependent, or a student with multiple dependents will stay the same ($3,200 and $5,362, respectively), rates for an individual student will increase to $1,350 -- a 35 percent increase.

All full-time Penn students are required to have health insurance coverage, but those who rely on PSIP are mostly graduate and professional students. PSIP is offered through the Chickering Group.

Vice Provost for University Life Valarie Swain-Cade McCoullum said the University fought hard to keep increases as low as possible, but after years of keeping premiums stable, it was unable to do so.

And although she and other University administrators are concerned about students who will be heavily impacted by the price increase, health insurance must still be required of students.

"Even several students without insurance hit against the Student Health Services Budget. Even a few catastrophic illness could wipe out the entire budget and the care for the other 20,000 Penn students," McCoullum said.

"Penn and all our peer institutions are worried and deeply concerned that these students are able to get the care they need," she said, but added that health insurance offered by schools is "a national problem."

Stanford University is a prime example, with students who cannot afford coverage being told by the university to seek medical assistance from the government.

The problem hits universities because of the small population seeking assistance. Penn tried for the past few years to have two separate carriers offering plans to students.

"By having more than one carrier, what you have is a great deal of head-to-head competition for every single enrollment. There is some degree of underbidding on the cost of the premium and overbidding in terms of the benefits that are offered, and eventually they mismatch," Evelyn Wiener, director of SHS, said.

Some insurance companies also offer two-tiered plans, but these are also problematic. "Everyone who is going to have very significant medical expenses is going to go to the richest possible plan. That plan gets more and more expensive, and really can't support itself. It has to be subsidized by lower payments, and so there becomes a disparity," Wiener said.

Decisions about PSIP are made by the Student Health Insurance Advisory Committee. Established in the mid-1990's, SHIAC includes eight student representatives -- two undergraduate and six graduate and professional -- the director of SHS and several other representatives. Deputy Provost Peter Conn chairs the committee on behalf of University Provost Robert Barchi.

"Every year SHIAC looks at the possibility of multiple carriers or having two plans with one carrier, which we did again this year," Max King of the Office of the VPUL said. "The price differential is pretty significant. So one of the compromises we made was we'll go with one plan with one price, and that's where we ended up."

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