(HR's Reply, below)
to your statement in the
recent Almanac, Penn contributes 80% of the cost of
benefits. I'm in the PENNCare plan right now, which will cost
my family $2,568 next year (A 27.4% increase!!!). If I do the
math that means Penn pays $10,272 of my PENNCare cost.
Cost: = $12,840 for Health Insurance Penn Contribution--80%
contribution--20% = $2,568
find that impossible to believe. While health care is expensive,
it would not cost my wife and me $13,000 per year. Can you explain
how you come to this figure?
note also in the recent issue of Current, Jack, you said
that the increase cost of $46/mo. in PENNCare is "offset
by a wider provider network." Maybe for some but for me it's
a gross/net extra cost of $46/mo.
feel like I'm a silent partner in the operations of the University
and it's health care providers but never to the upside, only on
the expense side. Costs are never reduced and even in years when
Penn may have a surplus, salary increases continue to exist in
a very narrow range.
puts a squeeze of those of us who try to excel in our positions
but find the financial rewards resulting in us doing slightly
better than breaking even, after taxes.
Dorfman, Political Science Dept.
letter by Mr. Dorfman appears to indicate that he interpreted
cost sharing to be 80% for all plans. In fact, the April
16, 2002 issue of Almanac stated, "Penn will contribute
an average of 80% of the cost of benefits. On average,
employees will be responsible for cost sharing the remaining 20%."
These cost sharing percentages were derived by averaging the subsidies
for all the plans and the subsidy level varies by plan. For example,
the PENNCare subsidy is 73%, the subsidy for the Aetna HMO plan
is 90%, and the subsidy for the Keystone HMO is 92%. For PENNCare,
the University will contribute $6,978 for family coverage during
the next fiscal year and an employee will be asked to cost share
27%, or $2,568.
plan costs are determined not on an individual basis, but on the
average expected cost for all plan participants, projected inflation
increases and our past utilization experience with these plans.
Mr. Dorfman is correct in his letter that health care is expensive.
The fact is that national health care costs are increasing significantly,
which means that health care premiums are rising as well. For
prescription drugs alone, which are included in each of the plans,
the average increase next year is expected to range from 20% to
30%. The University provides the prescription drug benefit as
part of the medical plan at no additional cost to employees.
year, the University provides employees with the opportunity to
evaluate their enrollment needs and make changes as they feel
best suit their personal circumstances. If cost is a factor in
their decision, employees have the opportunity to consider other
health care options. As stated in Almanac on April 16,
2002, employees may choose the Point of Service Plan, which offers
a very comprehensive benefit or they may wish to participate in
the Keystone HMO or Aetna HMO. We recommend that employees choose
their options carefully by balancing their personal needs with
the plan description and the cost of the plan.
is also important to consider that in calculating net cost, gross
income is reduced by the amount of medical contributions; therefore,
employees save in federal, FICA, and applicable state taxes. To
the extent employees have un-reimbursed expenses or out of pocket
costs, they can use the pre-tax spending account, which will also
reduce their income for tax purposes.
we regularly benchmark our plans with those of other Ivy League
and other research institutions, we know that the plans the University
offers our employees are very competitive and are generous vis-à-vis
the level of benefits. Our goal continues to be to provide our
employees with a variety of health care options to meet their
needs and provide the best possible value for them and their dependents.
John J. Heuer,Vice President for Human Resources
Out welcomes reader contributions. Short, timely letters on University
issues will be accepted by Thursday at noon for the following
Tuesday's issue, subject to right-of-reply guidelines. Advance
notice of intention to submit is appreciated. --Eds.