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December 4, 1997

Double-digit increases predicted for next health insurance contract

Pitt can expect double- digit hikes in its health insurance rates next summer, according to the co-chairperson of the University Senate benefits and welfare committee.

"You may expect a big jump" in rates, James Holland told Faculty Assembly Dec. 2. "You definitely don't have to be a weatherman to know which way the wind blows on this. It [a hefty increase in employee medical insurance costs] is happening all over town." After the meeting, Holland predicted, "Certainly, the increases will be well into double figures." Ron Frisch, interim associate vice chancellor for Human Resources, said Pitt's rates undoubtedly will rise but added, "It's too early to predict what those increases will be." Historically, Pitt has paid the full cost of rate hikes for employees with individual coverage (although the employee remains responsible for co-payments and other patient fees), while employees with family members covered through their Pitt insurance have paid some share of their rate increases.

Frisch and Holland serve on a committee that is advising Pitt's administration as the University negotiates a new health insurance contract. The group, called the Pitt-Flex Advisory Committee, includes representatives of the University Senate, the Staff Association Council and the Human Resources office. Pitt has hired consultants William M. Mercer, Inc. to help in evaluating bids from health insurance companies.

The University's current three-year contract with Highmark Blue Cross and Blue Shield expires June 30, 1998.

For the University's next contract, Pitt requested proposals this fall from five insurers. Three have submitted preliminary bids: Highmark Blue Cross/Blue Shield, HealthAmerica, and the UPMC Health System's Tri-State Health System.

Representatives of the three insurers are scheduled to meet Dec. 10 with the Pitt-Flex Advisory Committee to discuss their bids. The committee plans to meet Dec. 12 to further evaluate the bids.

Committee members hope to forward their recommendations to Pitt's administration by early January, Holland and Frisch said.

Holland pointed out that, while he and his fellow committee members have read the preliminary bids, they promised not to reveal details to the public at this time. "But I don't feel it's violating that promise to say it appears as though next year's rates will increase by a double-digit percentage," Holland said.

Two insurers declined to bid for Pitt's business: Pyramid Health (a network formed by Allegheny General Hospital) and U.S. HealthCare.

When Highmark won its current, exclusive contract with Pitt in 1995, the company guaranteed to limit rate increases here to 4-10 percent for the second year of the contract, and 7-15 percent for the third year, depending on the plan and coverage option.

Highmark currently offers four plans to Pitt faculty and staff: the Keystone health maintenance organization, to which 2,500 Pitt employees and their family members subscribe; the University Health Network (UHN) preferred provider plan, with 1,500 such subscribers; the SelectBlue point-of-service plan, with 1,200 Pitt subscribers; and the Comprehensive (or deductible indemnity) plan, with 1,000 Pitt subscribers.

Whichever company wins all or part of Pitt's employee health insurance business for next year, UHN will no longer be an option after June 30, 1998. The plan will be dissolved after that date.

But Holland advised UHN subscribers to hold off on finding new primary care physicians until the new contract is finalized. Nearly all UHN doctors are available through Highmark and/or Tri-State, he said.

— Bruce Steele

Filed under: Feature,Volume 30 Issue 8

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