The University Record, October 11, 1999

Tapped-out reserves partly responsible for higher BCBS rates

From the Benefits Office

The Benefits Office has received some inquiries related to the increase in BCBSM/United health insurance rates for two-person and family coverage levels for 2000.

To recap recent BCBSM/United rate history, the rate dropped for benefits years 1997 and 1998. The decrease was possible because the University had accumulated surplus reserve funds for the plan that were applied against the rate for the benefit of participants. However, the decreases for those years used up the surplus reserves and the rate must now increase for 2000.

Other important factors in the rate increase include a significant increase in prescription drug costs, and the higher level of retiree participation in BCBSM/United. In fact, 64 percent of BCBSM/United participants are retirees and 36 percent are active faculty and staff. Retirees are more frequent users of health care services, and high usage of services results in increased rates.

Less than 8 percent of active faculty and staff are currently enrolled in BCBSM/United, and only 3.2 percent have two-person or family BCBSM/United coverage.

If you have questions about the BCBSM/United health insurance plan, contact any Benefits Office: Main Campus, 763-1214; Medical Campus, 764-6584; Flint Campus, (810) 766-6845; Dearborn Campus, (313) 593-5192.