Jim Nelson, Student Health Center, (515) 294-5802
Steve Sullivan, News Service, (515) 294-3720


AMES, Iowa -- To avoid a 30 percent hike in student health insurance rates this fall, Iowa State University has switched providers.

Under the new provider, G.M. Southwest, rates for student coverage will increase only 5 percent.

Earlier this year, Blue Cross and Blue Shield informed Iowa State officials that rates for student health insurance would increase by 30 percent this fall and another 13 percent in fall 2001. Blue Cross and Blue Shield has been the student health insurance provider for the past several years.

In response to the anticipated increases, bids were sought for the student health insurance program. G.M. Southwest, based in Dallas, was selected from six bidders.

"The rate increase we were facing was unacceptable and put the student health insurance coverage program in jeopardy," said Jim Nelson, director of the Student Health Center. "Insurance rates are going up across the country, but we believe we have come up with an alternative that is affordable and ensures continued quality care for our students. Nancy Brooks in purchasing and the student health insurance committee deserve a lot of credit for the work they did on this issue."

Based on fall 2000 enrollment figures and the anticipated Blue Cross and Blue Shield increase, the change in coverage results in a savings of approximately $1 million in premiums over the next two years, Nelson said.

Under the G.M. Southwest coverage, which goes into effect Aug. 11, rates for student health insurance will increase 5 percent -- to $572 annually for a single plan. The deductible will increase to $400 for single and $800 for family plans, up from the previous $200/$400 arrangement. Out-of-pocket maximum payments also will go up. For example, co-payment on an emergency room visit will increase from $50 to $100. Mental health outpatient treatment visits will be limited to 20 per year. Under the previous program, visits were unlimited.

G.M. Southwest has guaranteed that rates will not increase more than 5 percent in fall 2001.

Nearly 5,000 students participate in Iowa State’s health insurance program each year. The majority of participants are graduate students and international students, who are required to have coverage. Approximately 500 undergraduates sign up for the coverage. Most undergraduate students are covered under their parents' health insurance policies.

The 5 percent increase not only affects students, but also colleges and academic departments that pay health insurance costs for graduate student employees.


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