Why are Stanford’s healthcare premiums being hiked?

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Every year, Stanford University renegotiates with its healthcare providers to dictate premiums and rates for its faculty, staff and retirees. This year is no different from that trend. But this year, for a myriad of reasons, is anything but a normal one, and the University has not shifted its policies to reflect this reality for its community members. With COVID-19 still gripping the nation and medical usage down across the board, Stanford’s policy on healthcare premiums is no exception to this trend of negligence.

Beginning in 2021, faculty and staff premiums for Stanford Health Care Alliance (SHCA) are increasing by a whopping 20% and even the least expensive plan, Kaiser, is going up 5.6% for 2021. In comparison, the economic impact for Stanford retirees is even more dire. The only health plan offered by Stanford for its retirees in 2021 that provides access to care by Stanford health care providers is through Blue Cross, and those premiums are increasing by 8.1%. These retirees are Stanford faculty and staff who have worked tirelessly, often for 25 years or more, and have dedicated a substantial portion of their lives to making Stanford a world-renowned institution. During retirement, most retirees invariably live on a fixed income. Stanford’s health care premium increases are unjustifiable and cause tremendous financial burden on Stanford faculty, staff and especially retirees. In light of a pandemic that is seeing a devastating resurgence and plunging medical usage across the country, why will Stanford’s health care premiums take such a large jump for faculty, staff and retirees in 2021?

Furthermore, these hikes continue Stanford’s troubling trend of opacity and lacking accountability around employee healthcare. Our union — Service Employees International Union (SEIU) Local 2007 represents more than  1,200 Stanford employees, and we have repeatedly requested that a representative from SEIU be included on any Stanford committee that negotiates and determines benefit rate levels. These requests for inclusion and transparency have been outright rejected without explanation from Stanford University. Our union specifically requested a representative on the Stanford Benefits Committee, given that we represent over 1,200 Stanford employees — we were outright refused. We have also asked for a rep on the Affordability Task Force — again we were refused.

Stanford’s negotiations with insurers, by their own design, is an opaque process. The University refuses to discuss with us specifically how they arrived at a particular increase, except for vague statements such as “we negotiated them down from the 15% [Kaiser] originally wanted,” or “we compare ourselves with other local entities” without any specifics. This opacity persists, even as insurance rates for Stanford employees are much higher across the board compared to our peer institutions, such as UC Berkeley, and especially higher for retirees. We do not know how Stanford’s negotiations with insurers proceeded, but Stanford management obviously did not take into account the interests of those who stand to suffer the outcome of this opaque process. It is particularly important to note that, on the issue of SHCA premiums, Stanford is essentially negotiating with itself. Furthermore, many times in the past, the University has stated that it is at a disadvantage in negotiation because of its small size, but it has made no meaningful attempts at alliances that could bolster its negotiation position. For example, our union has suggested in the past that the University attempt to work with other private universities, such as Santa Clara University and/or USF, but so far there have been no indications of such attempts being made. 

Stanford’s policies around healthcare have not adjusted to meet our current moment. This negligence, combined with a lack of inclusion and transparency, is troubling in normal times — it is unforgivable during an ongoing pandemic. Affordable health care is essential for our members and for all Stanford faculty, staff and retirees — we all need to know why it is being denied by the University.

Richard Patrone 

Executive Board Secretary 

SEIU Local 2007

Contact Richard Patrone at richardpatrone ‘at’ gmail.com.

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