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The Daily Tar Heel

Grad Student Health Insurance Costs to Rise

Nationwide, health care costs are expected to rise by an average of 17 percent next year. But the Student Health Advisory Board approved a plan Monday with only an 8.3 percent increase, down from a 32 percent proposed increase, said board member Mike Poock, assistant dean of the Graduate School.

Student Health Service Director Robert Wirag said the plan to renegotiate the University's BlueCross BlueShield contract must now go to Sue Kitchen, vice chancellor for student affairs, for final approval.

An estimated 5,300 to 5,400 graduate students, teaching assistants and research assistants will be affected by the approved health care plan, which offers two levels of coverage, Poock said. Students can purchase basic protection of up to $250,000 for $1,019 per year or catastrophic protection of up to $1 million for $1,036, Poock said. Students can also purchase insurance for their spouses and children.

Because the gap between the two options is much smaller than it was last year, when catastrophic protection cost an additional $76, Poock said he thinks many more students will purchase the catastrophic protection this year. "The difference in catastrophic verses basic is going to be about $17 per year -- you'd be foolish not to do that," Poock said.

Poock said it is important for the University to offer comprehensive, affordable health care because it is one way to attract the highest-caliber graduate students.

Law student and Student Health Advisory Board member Bethany Burgon said the most important change is that the coverage on the basic plan has been raised from $100,000 to $250,000. "We'd had problems in the past with students going over that $100,000 and having to pay for the difference themselves."

The renegotiation of UNC's health care contract was prompted by BCBS's transformation from a nonprofit to a for-profit organization, Poock said. He said when the insurance provider decided to privatize, it raised the rates for UNC's plan by about 32 percent.

The large increase was necessary because claims have risen dramatically in the last two years, said Dan Hill, an insurance broker at Hill, Chesson & Woody, the liaison between the University and BCBS. "BlueCross right now, for every $1 they collect, is paying out over 90 cents," he said.

To reduce the increase in cost from 32 percent to 8.3 percent for students, Poock said the advisory board agreed to lower the reimbursement rate for in-network services from 90 percent to 80 percent and for out-of-network service from 70 percent to 60 percent. An insurance group's network is a list of doctors approved by the company.

Poock said he thinks the change is justified in light of the significant savings.

Another significant change in the new plan is that students will have a $20 co-pay at the Student Health Service Pharmacy instead of a $10 co-pay, Burgon said. "In all the analysis, they discovered the greatest cost for the plan was the amount of prescriptions that had been filled," Wirag said.

Hill said that although some compromises had to be made to lower the increase from the original 32 percent proposal, he thought students will still receive a good deal. "It's still a policy that I think a lot of these students' parents would love to be covered under."

The University Editor can be reached at udesk@unc.edu.

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