The rising cost of health care

This year the cost of Portland State’s voluntary extended insurance plan has increased by over 50 percent, costing some students hundreds of dollars more per term.

The increase was decided on in May by the PSU Center for Student Health and Counseling (SHAC) management. Students aged 24 and under have seen the largest increase, with rates being raised from $255 per term to $428, or 59 percent. Insurance prices for all other age groups have also gone up about 56 percent.

Kathy Somerton, who works as PSU’s insurance broker, said about 350 PSU students purchased the optional insurance package last year. Many students that purchase insurance do so knowing they will need medical treatment or when they are already sick, she said.

Somerton, who works with Wells Fargo Insurance Services, PSU’s insurance agency, said the more claims that are filed from sick students, the more the cost of insurance increases.

Combined Insurance, PSU’s insurance carrier, paid out over $1 million in claims last year, according to Somerton. While Somerton said she doesn’t yet know the final figures, she estimates that they are operating at a substantial loss.

Mary Beth Collins, interim director at SHAC, said efforts were made to keep the cost of insurance down, including dropping the dependent insurance plan used by only seven people last year. She recognizes that the cost has driven some students away from the extended insurance and encourages everyone to check out their options.

“Frankly, for this amount of money, you might be able to get into Blue Cross Blue Shield or some other plan,” Collins said.

Making the extended plan mandatory for students would bring the cost down and make it closer to what international students pay for extended insurance, Collins said.

All international students at PSU are required to purchase extended insurance coverage. The more students that purchase insurance, the lower the cost will be. Because international students are required to purchase the extended coverage, the cost is lower to them than to students that purchase the insurance voluntarily.

International students pay $183 per term for extended insurance. (Not including the base $142 per term basic health care fee.)

A plan similar to PSU’s, offered by Providence Health Plan, costs $126 per month for 21- to 24-year-olds. For a year of coverage it would cost $1,512 under the Providence Health Plan—$716 less than the $2,228 it would cost through Portland State. The difference is that Providence can reject insurance buyers if they are in poor health, while PSU will not.

The cost increase was a surprise to Nick Walden Poublon, the director of university affairs for Associated Students of Portland State University (ASPSU).

The ASPSU university affairs director did not hear about the increase until July, when he received a notice in the mail. Poublon has been an advocate of PSU extended insurance for some time and has encouraged many students to purchase it, but not anymore.

“It looks like what’s done is done,” Poublon said, but added that ASPSU is looking into options. “I’m not going to say we aren’t willing to fight this.”

Poublon said the drastic rate increase was shocking to him, and that many students have voiced concerns over the increases.

Matt Cittadini has been a part-time student at PSU for almost a year and is now a full-time student. He said he was thinking about purchasing insurance until he found out about the increase.

At age 53, student Susanne Galligan will have to pay $897 per term instead of last year’s $510—an increase that does not fit into her budget.

Graduate student Emerson Murphy-Hill has purchased the extended insurance for the last three years but said he is likely to discontinue his coverage this year because of the new price.

It remains to be seen if the cost increase will drive away more students, which would drive up the price of insurance even more, but Poublon thinks it is a possibility.

What is disconcerting to Poublon and other students like Murphy-Hill is what they see as a lack of communication about the new rates. Collins said efforts were made to inform current extended insurance holders about the new rates.

Poublon said the insurance rates are part of a larger issue of PSU making sweeping changes to costs and programs and failing to adequately inform students.

“This should have been a huge, huge issue and it’s not,” he said.

Health care costs are rising nationally, according to Matthew Carlson, associate professor at PSU. Carlson, who has a background in medical sociology, said insurance rates generally increase by about 10 percent each year.

The basic PSU plan, which every student taking nine or more credits must purchase, has less coverage then the optional extended plan. It covers up to $10,000 of medical coverage for each condition, while the extended plan covers up to $50,000. The extended plan covers costs that the basic does not, including nursing services, intensive care costs and accidental death and dismemberment.

Rate increase for the optional student extended insurance plan:

(Costs do not include the mandatory $142 per term student health fee)

                             2006-07       2007-08

24 and under    $255             $428 (up 59 percent)
25 to 29              $298             $524 (up 56 percent)
30 to 39              $319             $561 (up 56 percent)
40 to 49              $408             $718 (up 56 percent)
50 and over       $510            $897 (up 56 percent)


SHAC is looking for students interested in serving on their student advisory board. If interested, contact interim director Mary Beth Collins through the SHAC office at 503-725-2800.