Gas station without pumps

2010 November 27

UC weird pricing for health insurance

Filed under: Uncategorized — gasstationwithoutpumps @ 00:05
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The University of California has just finished its “open enrollment” period, when faculty and staff can make changes in their benefit packages for next year.  Once again the University has transferred more of the costs to the employees, with the biggest differences in the health insurance. I used to get HMO insurance for myself and my family for free, but now I need to pay $455.87 a month ($5470 a year) for essentially the same policy.  I think that the University is actually paying more than they used to, but health insurance costs have been soaring, with no apparent change in health care delivery.  One wonders where all that money is ending up.

At some campuses (but not the one I’m at) there are cheaper HMO options: Kaiser and a new Health Net Blue and Gold plan.  Technically, the Blue and Gold plan is available here, but there are very few providers in town, and most aren’t taking new patients.  Since I don’t have a car, a doctor 20 miles away is not really an option.

In an attempt to appear progressive, the University has started  “banding” health insurance payments by employees.  They do this in a really brain-damaged way (the same way they’ve been doing since 2004).  They don’t base it on what people are paid, but on what their “full-time salary rate” is.  I think that means the 9-month rate for faculty, so those who get summer salary don’t pay more, but I’m not sure. Certainly those who are only being paid part time are paying at higher rates. The employee payments don’t go up gradually, but take big jumps at certain salaries.

salary range Employee monthly payment

(HealthNet HMO, self+adult+children)

s≤$47,000 $258.63
$47,000<s≤$93,000 $360.83
$93,000<s≤$140,000 $455.87
$140,000<s $554.30

Note that this banding results in non-monotonic compensation as a function of salary. If someone gets a raise from $93,000 to $93,001, their compensation doesn’t go up by $1, it goes down by $1139.   Similarly from $47,000 to $47,001 is a loss of $1225.

There is no good reason for this “banding”.  They could have equally well based the employee payments as a percentage of salary.  Why didn’t they? Stupidity? (always a tempting explanation for university administration) Desire to have more complicated computer programs? Listening to consultants? I have a different explanation, based on the following graph:

What fraction of their annual salary does a UC employee have to pay for health insurance premiums (HealthNet HMO, self+adult+children)?

Note that this is really not a progressive scheme.  The low-paid employees spend far more of their income on the health insurance payments than the administrators do.  A flat 5% would have been much simpler to implement and much fairer. Of course, the people at the bottom salary levels can’t pay the huge amounts this chart shows—they have to opt for the much poorer “Core” insurance that results in $3000 deductibles and only 80% coverage above that.

 

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