Chancellor Henry T. Yang recently joined chancellors from the UC campuses at Berkeley, Davis, Irvine and Riverside to officially terminate each university’s participation in the UC Student Health Insurance Plan, with the exception of UC SHIP dental and vision programs.

The decision was made at last Wednesday’s Council of Chancellors meeting, where the lead administrators confirmed that a third-party insurance company will replace UC SHIP medical on campuses that are discontinuing their participation in the program. Although UC SHIP programs are not legally required to comply with the federal Affordable Care Act, also known as Obamacare, these programs will continue to comply with the bill’s measures.
The UC chancellors unanimously agreed with the UC SHIP Advisory Board’s recommendation to abandon the pharmaceutical and lifetime caps on health insurance, after a number of students first protested the caps in February. Pharmaceutical caps restrict a student’s access to prescription drugs to costing around $10,000, while lifetime caps limit the total benefits a student will receive at the university to roughly $400,000, according to an official UC SHIP summary document.
According to UC Office of the President spokesperson Brooke Converse, the Council of Chancellors decided to approve the UC SHIP Advisory Board’s recommendation based on student feedback and an approval from the Executive Committee. However, Converse said any increase in costs due to the decision may be compensated by an increase in student fees, which has already been predicted in light of the budgetary deficit at UC SHIP.
“Because some of the campuses chose to leave the program, we’re in the process of re-evaluating exactly what the costs will be for the campuses that remain,” Converse said. “Since these decisions were just made on Wednesday, that process is ongoing right now.”
Richard Artoul, third-year pharmacology major and UCSB representative to the UC SHIP Advisory Board, said Board members estimated a 3.32 percent increase in gross premiums to remove the caps, and he said a specific dollar amount will be released today.
“It’s what the students wanted, so they decided to implement it,” Artoul said. “There’s been a lot of negative press about the caps.”
While the university is still in the process of negotiating with outside insurance groups, Artoul said prices for student medication should remain similar to rates with UC SHIP rate and still hold less financial risk.
“Chancellor Yang received recommendations from multiple groups on campus, and the general consensus among students seemed to be that we wanted to withdraw from UC SHIP because if we remained in UC SHIP and the plan incurred losses again, we would be liable for those losses,” Artoul said. “What they thought would be best was to withdraw from UC SHIP medical and get our own third party full funded plan, from like a broker…”
Some campuses decided to leave the vision and dental plans as well, according to Artoul, who said Chancellor Yang decided to stay within those programs because they are already coordinated through a third party.
“The medical part of UC SHIP was a self-insured plan, which means that the university was accepting all kinds of liability for losses because … if we had to pay more than we got in premiums then we lost money,” Artoul said. “But the way the vision and dental works — that’s contracted out through a third party group, so there’s no liability for losses through vision and dental.”
Furthermore, leaving the UC-wide insurance program also allows UCSB more freedom to specialize its plan for students on campus, Artoul said.
“Now we don’t have to deal with UC SHIP administration or management, so we don’t have to make any changes to our student health facilities,” Artoul said. “We can do what works best for our campus, then we can make changes at a local level, and we can make those decisions among ourselves and among the student body and with the student health administration, as opposed to having the UC SHIP management and administration just dictating downwards how things are done.”