Repository: UIHistories Project: Board of Trustees Minutes - 1968 [PAGE 1137]

EXTRACTED TEXT FROM PAGE:

1968]

U N I V E R S I T Y OF I L L I N O I S

1085

The need for such a fee has been apparent for some time, but the increase has been resisted in an effort to keep total students costs as low as possible, and, at the same time, provide adequate professional educational and health benefits. Currently, McKinley Hospital is on a charge-for-service basis, and the hospital's income is derived principally from claim payments under the present insurance program. However, the present insurance program does not provide sufficient income to meet operating costs, and support has been provided from the General Reserve. The amount of this support has reached the point that other sources of support are needed. A special committee appointed by the Chancellor for the Urbana-Champaign campus has reviewed the financing arrangements for McKinley Hospital. After consultation with student representatives, the committee recommended that the Hospital be supported by a student fee, a method of support less expensive than providing an insurance contract which would provide, through claim payments, sufficient income to meet operational costs. It is also recommended that the McKinley Hospital student fee be combined with the Hospital-Medical-Surgical fee (which is the subject of the following agenda item in connection with the award of an insurance contract) and that a single Hospital-Medical-Surgical fee of $16.00 a semester or summer term be assessed. The insurance contract will provide coverage at all legally operated hospitals, other than McKinley. Students will continue to have free choice of medical care in any legally operated hospital and may have the Hospital-Medical-Surgical fee waived if they present evidence of insurance equivalent to the University program. O n m o t i o n of M r . H a h n , t h e s e r e c o m m e n d a t i o n s w e r e a p p r o v e d . HOSPITAL-MEDICAL-SURGICAL PROGRAMS FOR STUDENTS AND STAFF (13) T h e contracts for the Hospital-Medical-Surgical insurance programs for staff and students 1 are currently underwritten by the Continental Assurance Company of Chicago. In 1964 and 1965 this firm was the successful low bidder, and in 1966 an additional program for the staff was adopted along with other improvements in benefits. The contracts have been continued without increase in premium rates but with some improvements in benefits of the staff programs. The purchase agreement provides the right of renewal of the contracts upon the mutual agreement of the insurance company and the University. The Continental Assurance Company has agreed to place the current contracts and succeeding contracts on an Experience Rating Plan. Under this arrangement, the company will credit the policy holder with any reserves which result after the payment of claims, plus a percentage of the earned premium, which they would retain for the cost for administration of the program. The following is a schedule of the percentage of earned premium which the company would retain: Contract Year Percentage of Earned Premium 1967-68 5.25 1968-69 4.5 Thereafter 4.0 T h e University will not incur any liability for additional premiums if the claim payments exceed the premium paid. The total costs of current medical services and the claim payments under the insurance contracts have indicated a need to substantially upgrade the benefits of our plans and to provide coverage for medical expenses not now within the scope of our present policy. In redesigning the insurance contracts and extending coverage for medical expenses which are not currently covered, it is desirable to have an Experience Rating Plan to be sure the adjusted premiums are not excessive. _ A review of both programs and the Experience Rating Plan has been made by an independent consulting firm, Corporate Policyholders Counsel, Inc., 20 North Wacker Drive, Chicago. Based upon their report, the Vice-President and Comp* The student Hospital-Medical-Surgical fees have been approved by the Committee on Fees. The McKinley Hospital fee is the subject of the preceding agenda item.