Health insurance carrier proposes 20 percent rate hike for faculty and staff St. Thomas Newsroom September 28, 1999 Health insurance carrier proposes 20 percent rate hike for faculty and staffI would like to take a few moments to share with you some of the realities that we are seeing with rising costs in the current health care marketplace so that you may plan ahead and prepare for medical plan renewals on Jan. 1, 2000.As you may have heard from various sources in the media, it appears that the upcoming renewal season for health insurance is going to return us to a wave of double-digit increases in the cost of health care. We have seen consistent evidence of this across the board in recent renewals from all the major carriers. CFG Insurance Services of Minnetonka recently reported that increases in the cost of health insurance range from 16.3 percent to 28.4 percent for the three major providers (HealthPartners, Allina, Blue Cross Blue Shield) in the Twin Cities marketplace. The state of Minnesota, the largest employer in Minnesota, recently experienced a rate increase of 23 percent.Our current carriers have proposed a 20 percent increase in health insurance rates for the University of St. Thomas beginning Jan. 1, 2000. This increase is similar but slightly below the increases experienced by similar institutions in the Twin Cities marketplace.In the Twin Cities, smaller employers seem to be taking some of the bigger increases. Medica’s average increase is 16 percent for their November small-group renewals and Blue Cross Blue Shield has reported that their average small-group increase is now slightly over 20 percent. Even in larger groups including HMOs, it has not been uncommon to see 20 percent to 40 percent increases when higher-than-usual claim utilization rates are factored.The most frequent reasons cited for the increase in health insurance premiums are: the demand for more expensive brand-name drugs being widely marketed directly to consumers by pharmaceutical companies; a change in demographics with an aging population that is receiving more and higher cost treatment; and higher overall utilization by plan participants. The data from our health care providers indicates that all three of these factors are present in the increase in the premium for the University of St. Thomas.The members of the Fringe Benefit Advisory Committee have been meeting since early September to devise strategies with our carriers to contain the rate increase as much as possible. A special thanks to the members of the FBAC for their hard work on this very difficult issue. We will complete negotiations with our carriers by mid-October and announce the renewal rates and enrollment periods soon thereafter. We will strive to continue to provide the best available health care coverage at the lowest possible cost to the faculty and staff of the university. Unfortunately, we are caught in a medical-cost spiral for the reasons stated above, which are all far beyond the control of the university or its faculty and staff.If you have any questions, please contact any member of the Fringe Benefit Advisory Committee: Mary Anderley, Marsha Blumenthal, Greg Hendricks, Michael Jordan, Roxanne Kainz, Diane Luke, Pat McGowan, Denise McManus, Bob Miller, Steph Monogue, Mary Reichardt, Al Sickbert, Colleen Striegel and me.