Ball State faculty and staff on the traditional heath plan will see a 24 percent increase in their health insurance premiums due to an expected increase in costs next year, Lawrence Cistrelli, Director of Risk Management and Insured Benefit Programs said.
Employees on the Preferred Provider Organization plan can expect a 16 percent increase in premiums.
Last year, the health plan, which is funded by 75 percent of the university and 25 percent by employees, had a deficit. The deficit for the current year will be even larger. The increased premiums will not be used to pay off deficits from previous years, but will be used to avoid a deficit in the coming year.
"Things were going rather badly, but not because of anyone's fault," said Cistrelli.
Ball State is not the only organization having difficulty with increasing health care costs. According to a recent report from the U.S. Department of Health and Human Services, health care costs per person are expected to nearly double from their 2000 level by 2011.
This increase, combined with the recent economic downturn, is putting a pinch on many employers and on state governments.
Costs are increasing for a variety of reasons. Doctors are raising fees to battle the loss of profits from their managed care network and Medicare patients. Prescription drug use is increasing, especially brand-name drugs. Finally, the U.S. population is aging and requires more doctor and hospital visits to counteract chronic illnesses.
These factors, which are affecting the nation as a whole, are also hitting hard at Ball State. When doctors raise fees for patients not on managed care networks, Ball State's traditional plan has to pay the higher rates, although the PPO plan does not. Ball State paid over three times as much for prescription drugs in 2001 as it did in 1999. And, as Ball State employees and retirees get older, their medical bills increase.
"A lot of our employees are baby-boomers. We have a lot of older employees and employees with health problems," said Cistrelli.
Between 1999 and 2001, costs have increased across the board. The number of employees with chronic illnesses increased 38 percent, hospital admissions rose 10 percent, the amount paid for hospital visits rose 40 percent, the amount paid for visits to physicians rose 37 percent, and the cost of X-rays and lab work rose 35 percent.
Employees on the traditional plan will see premiums increase to $106.90 a month for individuals and $227.50 for families. Employees on the PPO plan will see an increase of 17 percent, to monthly rates of $82.54 for individuals and $214.26 for families.
Employees who change from the traditional plan to the PPO plan during enrollment, which ends May 31, will have lower premiums than last year. Employees can change their coverage at the Payroll and Employee Benefit Office in AD G29.
Students who have insurance through the university are on a completely separate program, not run by the university, and will see an increase in premiums of 7 percent.