* Letter to UC regarding health care plan changes – 1/12/15

On January 12, 2015, The SCFA sent the following letter to UC President Janet Napolitano and also sent copies of the letter to half a dozen UC officers. Dwaine B. Duckett, UCOP Vice President of Human Resources responded with a letter dated January 22, 2015, available HERE.

The UCSB Faculty Association also wrote to President Napolitano regarding the connection between the situations of UCSB, UCB, and UCSC in relation to Blue Shields / UC Care. You can read their letter HERE

We also have linked HERE an email on failing UC Care medical plan, from former UCOP budget director Michael Rancer to UCOP’s Vice President of Human Resources Dwaine Duckett



President Janet Napolitano
Office 12122
1111 Franklin Street
Oakland, CA 94607

Dear President Napolitano,

The UC Santa Cruz Faculty Association is increasingly concerned about the state and reliability of the medical insurance providers with which the University contracts. In particular, we are alarmed by the recent announcement that Blue Shield of California is terminating its contract with Sutter Health of Northern California. As a result, after the end of June, access to Sutter’s medical centers, especially those of the Palo Alto Medical Foundation, at contractual rates will no longer be available for thousands of UC staff and faculty signed up with UC Care.

According to the fact sheet issued by Blue Shield,[1] not only will access be terminated, during the transition period, “Sutter’s charges will be higher, and members should be aware that this will result in higher out-of- pocket expense for services received from Sutter.” Thus, UC Care members will be charged for 20% of the noncontractual rate charged by Sutter for medical services. Over the course of the next six months, this will impose an unacceptable burden, especially for those faculty and staff in lower income brackets who signed up in full faith. We might note that, during Open Enrollment for 2015, nothing was said about the Blue Shield-Sutter negotiations or the possibility that these might lead to contract termination.

This is not the first time that UC staff and faculty have been subject to such disruption. In 2013, we were informed that UC had ended its contract with HealthNet without providing a comparable plan for UC employees using Sutter Health facilities. We were then presented with a PPO, managed by Blue Shield, whose terms and costs were by no means clear. Finally, we have received reports that higher costs have been imposed for certain medical services simply because UC forgot to include them in contract negotiations with Blue Shield. We recognize that UC contracts with Blue Shield to administer UC Care, but this does not obviate UC’s obligations to staff and faculty.

We understand that medical costs continue to increase and that UC employees are expected to cover a significant fraction of health insurance costs. But the result has been both higher out-of-pocket expenses and what is effectively a salary reduction. The pattern in recent years of late-breaking changes to health plans and service reduction suggests that the UC administration places too low a priority on the health and welfare of its employees, and we ask your administration to take immediate steps to address this imbalance.

We urge you in the strongest terms, first, to put pressure on both Blue Shield and Sutter Health to come to a contract agreement so as to avoid the costly impacts of termination on UC employees. Second, we urge UC, in its contractual negotiations with health insurance providers, to ensure that UC employees are guaranteed reliable, rational, and dependable health insurance options.
Yours sincerely,

Ronnie D. Lipschutz
Chair, UC Santa Cruz Faculty Association
Professor & Chair of Politics

Cc: Mary Gilly, Academic Council Chair and Faculty Representative to the Board of Regents
Robert May, Chair, Faculty Welfare Task Force on the Future of UC Health Care
Joel Dimsdale, Chair, University Committee on Faculty Welfare
Nathan Brostrom, Executive Vice President – Chief Financial Officer & Interim Chief
Operating Officer, UCOP
Dwaine Duckett, Vice President, Human Resources, UCOP