FAIRBANKS — University of Alaska health insurance rates are expected to shoot up this summer by anywhere from 48 percent to 257 percent, according to projections presented to a university health care committee March 1.
Abel Bult-Ito, president of United Academics, the faculty union, said UA Human Resources Office Donald Smith has confirmed the rates are to take effect July 1.
The out-of-pocket maximums and the deductible rates, which went up sharply last year, would not change for the fiscal year starting in July. The premiums, which do not count against the out-of-pocket maximums, would rise by substantial amounts, however.
For the mid-range plan, biweekly rates for a family for 19 pay periods would go from $164 to $336.
The biggest changes would come with the “high deductible health plan.”
The rate for an employee would rise from $21 to $77 per pay period. The family rate under that HDHP plan would jump from $58 to $216.
The highest end plan would see an increase for families from $375 to $573 per pay period, for 19 pay periods.
A letter sent to faculty members Wednesday from union representative Abel Bult-Ito and Melanie Arthur, a member of the Joint Health Care Committee, stated, “Our health insurance plan is in trouble.”
“It is clear that the current fiscal year’s large increases in out-of-pocket expenses and the coming year’s sharp increases in employee contributions are unsustainable.”
They said the committee approved a motion March 7 asking that UA President Pat Gamble direct $1.5 million toward health care expenses to reduce the increase for the next fiscal year.
Bult-Ito and Arthur wrote that the committee was told Tuesday the request was denied.
Smith, the Anchorage-based human resources officer, said Gamble’s reasons for not approving the change included a desire not to change labor agreements and concern about the budget impact on UA, according to the letter from Bult-Ito and Arthur.
They said 60 percent of the increase stems from rising health care costs in the past several years. About $7 million was shifted to employees this year with higher deductibles and out-of-pocket maximums, but “employee contribution rates are still too low to cover our contractural 17 percent of an expected $65 million in total health plan costs.”
The rest of the increase is to make up for a $3.5 million gap between employee contributions this year and the level of employee contributions necessary to cover the 17 percent that is to be covered by employees.
In the past nine years, the cost of insurance claims has tripled from $21.2 million. Claims are expected to drop this year to
$59.5 million, but climb to $64.7 million in 2013.
RETURN TRIP: Red Green, the alter ego of actor Steve Smith, plans to be in Fairbanks for the Red Green River Regatta and to do a one-man show in July.