Health-Benefit Premiums to Rise

December 22, 2003

Nick Marinello
Phone: (504) 865-5714

Tulane employees will see a rise of 9 percent in the cost of their healthcare premiums, starting in January.

inside1201_healthins_1Though no one is happy with any increase, it could be worse, said Yvette Jones, senior vice president for external affairs, who negotiated the terms of the deal with United HealthCare.

"United began by asking for a 25 percent increase," said Jones, who also worked the deal with United HealthCare last year. "The university felt we should have no increase, and after going back and forth we ended up at 9 percent."

It's an acceptable increase, said Jones, given the fact that the cost of healthcare nationally is rising anywhere from 15 to 20 percent.

Furthermore, Jones said she was pleased that the university was able to maintain the same three plans with no changes to the level of coverage. Tulane will continue to pay about 60 percent of the estimated $22.5 million yearly cost of the health-benefit plan, said Jones. Employees will pay the balance of the cost through premiums.

When asked about future healthcare options for the university, Jones said the Health Plan Oversight Committee is contemplating a return to a self-funded insurance plan for 2005 if the fully insured options aren't attractive enough.

"Right now it makes good sense for us to be fully insured because United carries all the risk and it is affordable. But at some point it will no longer be affordable, and pending on how we design the plan, it probably will make sense to be self-funded."

The university, added Jones, is not considering going back to a self-administered plan such as the Tulane Preferred health plan. One of the constraints in acquiring health insurance in Louisiana is that the state's population of four million is a limited market for insurance carriers, and there are few options from which to choose.

In addition to this, said Jones, the options are further reduced by the university's desire to steer business toward its hospital and medical group, which limits Tulane to two possible carriers: United HealthCare and Blue Cross.

"Those two private insurers actually carry both our hospital and our physicians in their plan networks," she said.

Tulane University, New Orleans, LA 70118 504-865-5000