Changes Suggested to Trim Purdue’s Health Benefits Costs

April 12, 2011 ( - Proposals presented to the Board of Trustees could save millions for Purdue University's health benefit system, a study committee said.

The Lafayette Journal and Courier reports that the Blue Ribbon Healthcare Committee, which oversaw a cost-saving study, recommended adjusting employee contributions to fit a plan’s level of benefits. Pam Aaltonen, chairwoman of the committee said the current two-tier benefit plan could be expanded to offer more tailored options.  

“But there should be some consideration to the lower income wage earners on the campus,” she said, according to the news report. The committee claims the proposal has the potential to trim up to $3.8 million depending upon the scope of changes.  

Charging a spousal surcharge when an employee’s spouse has access to other employer provided health care could bring $500,000 in savings, the committee said. Another proposal is creating exclusive agreements for select laboratory services instead of letting employees choose where to go for tests or imaging. The savings possibilities are estimated at $400,000 to $1 million.  

The committee also recommended developing a business plan for a campus health clinic and pharmacy.”It would be a clinic that would deliver primary care, acute care and work with the issue of how to keep our employees well longer,” Aaltonen said. According to the Journal and Courier, a campus survey taken last year found support for such a clinic.  

The committee’s proposal also included multiple downsides for Purdue employees including: loss of coverage for part-time workers; loss of coverage for same sex domestic partners; and potential for a dramatic increase in premiums for employees making less than $44,000 annually for coverage similar to what they currently have. 

Campus officials want to cut at least $5 million from health care costs during the next two years. In 2009, claims paid by Purdue’s medical plans amounted to $118.8 million systemwide. The estimated claims cost for 2010 is $125 million, an increase of 5.2% or $6.2 million, the news report said.