Saving the sinking SHIP

UNIVERSITY ISSUES: The UC Student Health Insurance Plan’s projected $57 million deficit reflects poor management by university administrators.

Students may need to pay a steep price for administrative mismanagements that led to a $57 million projected deficit for the UC Student Health Insurance Plan over the 2010-13 plan years. If UC SHIP needs to raise premiums in order to cover its three-year shortfall, students most sorely in need of affordable health insurance could bear most of the burden.

Had SHIP set more realistic premium levels, the current deficit would have been avoided by spreading out premium increases.  Officials blame the mistake on the firm responsible for setting premium levels. The university has since hired new firms to work with UC SHIP, as it should have, but important questions remain.

First and foremost, UC students need to know whether financial aid will cover the potential double-digit premium increase. While a UC spokesperson told The Daily Californian that health insurance costs will continue to be factored into financial aid, UC Berkeley Graduate Assembly President Bahar Navab, who sits on SHIP’s advisory board, said she was told differently. Those conflicting messages need to be reconciled as quickly as possible.

The whole issue casts UC administrators in a dim light. Even though they are shifting much of the blame to the previous firm, it is incredibly concerning that, given the university’s acute financial struggles, an error this large occurred over what essentially amounts to a miscommunication. At this point, the university appears to have no other option than to raise premiums, but the entire situation reflects poorly on how well the administration functions.

With more than 130,000 students voluntarily enrolled in UC SHIP, the university has an obligation to keep the plan affordable. If the price escalates too quickly, more students will begin to opt out of the plan. As Navab pointed out, that could leave students with the highest cost of insurance in the plan.  Preventing that from happening will require the university to restore some of the good faith it has lost.