UC Student Health Insurance Plan premiums could increase for the 2013-2014 school year due to a projected 57 million dollar deficit reported by actuarial firm Alliant Insurance Services last month.

According to the report, when UC SHIP was initiated in 2010 the actuarial firm in charge of consulting at the time — Aon Hewitt — initially set premiums for the plan at a rate that did not account for possible actuarial errors, and failure to monitor expenses regularly caused the projected deficit to build up over time.

UCSB Student Health Executive Director Mary Ferris said the large deficit came as an unpleasant surprise to many.

“The UC SHIP, student health insurance plan, started with a small number of campuses in 2010 and then UCSB joined it in 2011,” Ferris said. “So we are just entering our second year on this plan and it’s evidently been building up, but they have announced these deficits in the last few weeks and it’s been a big shock to everyone.”

According to Ferris, until the end of 2013, the $57 million dollar deficit is only a projection, and thus a decreased deficit is still possible.

“For the future, we can spread some of the deficits out over many years so it doesn’t all have to be paid back initially,” Ferris said. “We can change what the insurance covers so that it doesn’t cover quite as generous of benefits so they won’t have as many losses. There really are many things that they can do to try to prevent the deficits from getting so large.”

UCSB Student Health Patient Advocate Richard Artoul, a third-year pharmacology major, said UC SHIP management is currently working on a way to avoid the projected deficit by cutting costs as much as possible.

“The UC SHIP administration is currently trying to figure out how to adjust the plan to counteract the deficit and make it sustainable,” Artoul said. “They are currently considering three options — reduce benefits, increasing premiums and a combination of both.”

However, Ferris said if the price of student health insurance were to increase dramatically, the program would no longer be able to provide the same reasonably priced service and many students would opt out of the coverage.

“That would be a disaster for the plan and it would not be a good thing for students here at UCSB either,” said Ferris. “When we heard about these deficits, we encouraged the UC SHIP office to consider all possible options for how we can reduce the deficit and continue the high level of service and coverage that it currently provides.”

Fourth-year global studies major Stephanie Stupack said she is worried about the possible increase and its potential negative impact on students.

“I think UC Health Insurance is very valuable to students and we aren’t going to be able to afford it,” Stupack said.

The Student Health Advisory Committee will conduct a public meeting regarding the UC SHIP on Feb. 19 at 5 p.m. in the UCEN State Street Room.

A version of this article appeared on page 1 of February 7th, 2013’s print edition of the Nexus.