On top of rising tuition and fees, those UNC system students who buy the university-sponsored health insurance plan will face steep premium increases in the next academic year.
The cost of health insurance will climb from a range of $61 to $77 monthly to a range of $118 to $133 monthly, according to a memo sent from UNC President Tom Ross to the UNC Board of Governors. On an annual basis, most students will pay about $500 to $700 more in 2012-13, depending on the campus.
The percentage increases arent yet known for all campuses, because some have not chosen the level of coverage they will offer, said Bruce Mallette, UNC vice president for academic and student affairs. The annual student cost will climb 66 percent at N.C. Central University and 60 percent at UNC-Chapel Hill; the cost at N.C. State has not been finalized, Mallette said.
Notification of the rate increases will go out this week, just as students finish exams and leave campus for the summer. The news will sting.
A lot of students are going to be very surprised by this and at a loss for what to do, especially on such short notice for the next semester, said Kate Davis Jones, a UNC-CH junior from Raleigh who is still on her parents insurance. I think its going to cause a lot of students to be boxed out of their education if theyre not able to afford the mandated health insurance.
Jones said plenty of her classmates will feel blindsided, months after the UNC board set tuition and fee rates for next year, with average price increases of 8.8 percent for in-state undergraduates across the UNC system. The tuition and fee hikes are 8.5 percent at NCCU, 9.8 percent at NCSU and 9.9 percent at UNC-CH for the coming academic year.
Claims drive up costs
Mallette said the insurance increases are due to the health care usage of UNC system students during the past couple of years, plus federal regulations on preventive care and pharmacy services issued in March. The process is complicated, he said, by the new provisions of the Affordable Care Act.
Part of the story here is our own claims by students within the UNC system have driven up costs, Mallette said.
The cost at UNC is still below that of many other universities across the nation, UNC officials stressed.
Although these projected increases are substantial, Ross wrote in his memo, the plan would continue to provide quality coverage at comparatively low rates.
The idea with the systemwide policy was to leverage the buying power of 220,000 students statewide to offer reasonable premiums and better coverage. That apparently worked well during the years since it was mandated in 2010.
We had a tremendously good value in the first two years of the plan, and now claims and the cost of the industry have caught up to us, Mallette said. When you see U-Mass-Amherst at $2,776, it gives you a reality check.
About 64,000 UNC system students buy the UNC plan, which is offered through a company called Pearce & Pearce Inc. The highest cost next year will be $1,470.
This will be the third one-year contract under Pearce & Pearce. Mallette said UNC had the option to rebid the contract, but given UNC students claim history and the big changes driven by the federal health care law, it didnt make sense to go through the bid process two years in a row.
A major rebid will happen next year, when thresholds of required coverage will change dramatically because of the federal law.
The health insurance market will find some sort of equilibrium, because its the free market, Mallette said. This is an adjustment year in the industry.
Loans in the future
Increases for next year will be built into financial aid formulas, so needy students may be eligible for additional loans to cover the cost.
Theres no question, though, that the rising insurance cost is adding to the tab for higher education in North Carolina.
I find it very disturbing, said Hannah Gage, chairwoman of the UNC Board of Governors. I think that weve just got to understand better how we can provide what wed like to provide at a lower cost, because it is all part of the same package for a family. ... Its just one more thing that you add on top of tuition, with books and fees.