Caltech hikes healthcare costs for students during pandemic
PASADENA, CA — Caltech announced this week that it will push ahead with a controversial decision to hike student healthcare premiums, double insurance deductibles, and increase out-of-pocket maximums by 33 percent in next year’s health plan.
The decision, which was announced via email on Wednesday, comes despite strong objections over the last two months from hundreds of students, alumni, faculty, and staff. Over 750 Caltech community members — including nearly half of the entire graduate student body — signed onto a petition last week urging campus administrators to reconsider the drastic cuts.
“It’s truly unfortunate that Institute leaders, despite multiple requests, refused to speak with students to explain the cuts or discuss alternatives before the health plan was finalized,” said Dawna Bagherian, a Caltech PhD student in bioengineering.
The healthcare cuts were first proposed in March amid the global COVID-19 pandemic.
In an email to students on Wednesday, Graduate Studies Dean Douglas C. Rees wrote that the Institute would be increasing the student healthcare premium by 15 percent to $630.
Rees also confirmed that the Institute would downgrade the student health plan by doubling the annual in-network deductible to $500 and increasing the in-network out-of-pocket maximum from $1,500 to $2,000. Out-of-pocket maximums for non-network providers will increase to $5,500 — or nearly a fifth of graduate students’ after-tax stipend.
“The healthcare that Caltech offers its graduate workers is already far behind other schools, including UC Berkeley, MIT, Duke, and USC. None of those universities require their funded graduate students to pay extra for health insurance.” said Phelan Yu, a Caltech PhD student in physics. “Nationwide, Caltech’s premium contribution per student is less than half of the average premium paid by US employers for an employee PPO plan.”
“In addition to putting us further behind national standards, Caltech’s decision to cut essential health benefits for over a thousand of their graduate employees — during a public health crisis — risks seriously jeopardizing our critical teaching and research functions,” Yu added. “We cannot do our jobs effectively if we are sick, or if a hospital visit puts us thousands of dollars into debt from insufficient health insurance coverage.”
Approximately 1,500 students — including almost 90 percent of graduate students — are currently enrolled on the Institute’s health plan.
Many Caltech graduate workers say that the healthcare cuts are only the latest development in a series of increasingly unaffordable healthcare plans. Over the last four years, Caltech’s graduate student premium costs have ballooned by 30 percent, while stipend increases have barely matched rising housing and living costs.
In a 2019 survey conducted by Caltech’s Graduate Student Council, over a third of graduate student respondents said they had avoided necessary healthcare due to high costs. The same survey also revealed that women, parents, and students with chronic conditions are disproportionately more likely to face high out-of-pocket expenses or take on over $5,000 in debt due to life events “outside their control.”
“As a chronically ill graduate student, the cost of the ongoing care I need to live means that I consistently hit my out-of-pocket maximum every year,” said Jane M. Panangaden, a Caltech PhD student in mathematics. “The cuts Caltech administrators have made guarantee that I will be forced to spend at least an additional $500 in medical expenses next year, on top of the premium increase that all of us will have to shoulder.”
“From my perspective, Caltech is effectively giving me a pay cut because I’m disabled,” Panangaden added.
Caltech administrators have suggested that a $1,500 increase in graduate student stipends — which were designed to offset rising cost-of-living in Pasadena, CA — should be used instead to pay for increased health expenditures due to the cuts.
Students experiencing economic and medical hardships worsened by the coronavirus crisis say that they will be particularly hard-hit by the new healthcare plan.
“I am a graduate student from a low-income background who has avoided physical therapy for at least two years because of the expected cost. Forgoing medical care for that long, coupled with my lab work, which often involves regular physical activity as well as long, continuous periods of sitting and standing has given me chronic pain,” said Ashay N. Patel, a Caltech PhD student in physics. “This pain has only been exacerbated by working from home.”
“The cuts that Caltech administrators have decided to impose on me will make the healthcare I need even more inaccessible,” Patel said. “When I came to Caltech, I did not expect that the Institute would force me to choose between depleting my minimal savings and experiencing constant physical pain, let alone in the aftermath of a deadly global pandemic.”
The Caltech community first learned of the proposed cuts in late March, when a student representative — over the objections of administrators — publicized draft health plans that would offset approximately $300,000 in costs for the Institute through a combination of policy downgrades and increased cost burdens to graduate student workers.
The draft cuts were initially recommended by a faculty committee, despite strenuous opposition from a graduate student representative to the 14-member committee.
During an April 2 town hall on Caltech’s COVID response, administrators declined to answer over 90 questions and concerns submitted by students on the draft health plan. Following that town hall — which was held via remote video — campus administrators repeatedly rejected invitations from student groups to discuss the cuts, writing they had no further information to offer.
Many graduate students said they felt that Caltech administrators had left them in the dark about the healthcare changes.
“Caltech finalized these cuts — behind closed doors — without meeting with any students, and without any advance notice,” Yu said. “There has been zero transparency.”
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