Northwestern will raise health insurance rates for undergraduate and graduate students more than 45 percent next year to meet rising medical costs and keep NU’s health insurance program afloat.
The rates will increase to $889 a year for undergraduate students and $1,184 a year for graduate students, according to Chris Johnson, NU’s risk management and safety director. He said about 5,000 students use NU’s insurance program, nearly two-thirds of them graduate students.
All students at NU are required to have a health insurance plan, but not necessarily the university plan. NU provides its own insurance plan for students who need it, so they don’t need to go through a insurance provider.
Johnson said NU increased the rates based on a recommendation from an actuary, who looked at current medical costs and gave NU a rate that would allow the health insurance program to break even.
NU has not significantly raised insurance rates in four years. Johnson said the insurance program lost about $1.5 million last year, so NU increased rates 7.5 percent to $608 a year for undergraduate students and $812 a year for graduate students. Even with that increase, Johnson said the plan could lose $1 million this year because of the old rates and higher costs for medical care.
If NU continues to take heavy losses, it might have to cancel the insurance program and look into teaming up with a corporate contractor, Johnson said. He said NU’s insurance program does not have to pay for sales fees, taxes and advertising costs, so it offers students lower fees than insurance companies.
Johnson said he looked into dealing with insurance companies, such as Etna Insurance Agency Inc. and Megalife Insurance Co., but their rates were much higher than NU’s. Megalife would have charged undergraduate students $1,236 a year and graduate students $1,652 a year, and ETNA would have charged $1,341 and $1,797.
Graduate Student Association President Peter Meyer said he understood that NU’s insurance program needed to raise prices to stay in business, but he was upset that students had to pay the entire fee at the beginning of the year.
“It’s really tough on a new student to have to pay it all when they just spent a lot of money moving in,” said Meyer, an economics doctoral candidate.
Graduate School Dean Richard Morimoto said he was working with other administrators to change that policy and let graduate students pay one-third of the insurance cost every quarter.
Meyer also questioned why rates for graduate students were so much higher than undergraduate students’ rates, but said he realized rates go up as buyers grow older.
Johnson said nearly 75 percent of the claim money went to graduate student-related incidents.
ASG President Adam Humann said he wasn’t happy about the higher costs, but that administrators had taken steps toward making sure students weren’t too badly hurt by the change.
“We were informed that financial aid will increase to meet costs for undergrads, so it shouldn’t have that much effect on us,” he said.
Incoming ASG Student Services Vice President Courtney Brunsfeld said she would immediately start looking into the matter.
“It’s important to talk to administrators and the financial aid office and make sure everyone on the insurance plan can afford it,” she said.
Humann said ASG would probably not be able to lobby against the increased costs.
“It’s like tuition,” he said. “You can’t lobby against a tuition raise.”