Health insurance session focuses on lower-income employees

Updated 11:00 AM November 10, 2003

Health insurance session focuses on lower-income employees

By Katie Gazella

Concern about the impact on employees with lower incomes emerged as a prime issue during the first of a series of public sessions the University is holding about recommended health insurance changes for 2005. Some of the 30 or so people who attended the Oct. 31 discussion suggested the University develop a sliding scale so that people earning less would not pay as much for health insurance as those in higher income brackets.

"This is the University of Michigan. They should be able to, with the talent and resources here, figure out a way to do this that doesn't put a major burden on those who have lower incomes," said Saundra Bailey, program administrator for the Community Health Scholars Program at the School of Public Health.

Provost Paul N. Courant said the concern about the effects on lower-income employees "is the most troubling part" of the effort to change the way the employee portion of health insurance premiums is determined. He pointed out that the University has worked hard in recent years to raise the salaries of lower earners, and said he believes improving salaries is the best way to help those at the lowest end of the wage scale. Courant appointed the Committee on Health Insurance Premium Design (CHIPD) in April to deal with skyrocketing insurance costs. The committee recently recommended changes for 2005, including a premium-sharing model that better reflects the cost of choosing more expensive insurance plans; a greater University contribution toward coverage of employees and retirees than that of their covered spouses and other dependents; and a change from a three-tier to a four-tier structure in order to account for the lower health care costs of children. The committee said the changes are designed to encourage employees to choose the lowest-cost insurance plan that meets their needs, and to share with employees a small portion of future health insurance cost increases.

Committee members discussed developing a sliding scale or some other method for lessening the burden on lower-income employees, said Marty Eichstadt, benefits director for Human Resources and Affirmative Action, and a member of CHIPD.

"It's something the committee wrestled with for weeks," she said.

CHIPD surveyed the country to look at sliding scales, said Laurita Thomas, administrator, human resources, U-M Health System, and a member of the committee. They found one in California, in which employees were paying close to 35 percent of their health insurance premiums, far higher than the 5 to 15 percent U-M employees and retirees are being asked to pay, she said.

A second forum was held Nov. 5 at U-M-Dearborn. Future forums are:

• Ann Arbor North Campus, 1:30-3:30 p.m. Nov. 12, Chrysler Center, Room 220, Chesebrough Auditorium, 2121 Bonisteel;

• Flint Campus, 10 a.m.-noon Nov. 13, Harding Mott University Center Building, Happenings Room, 303 E. Kearsley St.;

• Health System, 2-4 p.m. Nov. 17, University Hospital, Room 2A201, Ford Auditorium, 1500 E. Medical Dr.

Those with comments may attend a forum or e-mail chipdcomment@umich.edu.

For more information, including charts of estimated costs for 2005, visit http://www.umich.edu/~hraa/chipd/.

Health insurance session focuses on lower-income employees

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