Stanford to Transfer Graduate Students with Dependents from HMO to More Expensive PPO

Facing a "financial crisis," Stanford Hospital and Clinics has announced that it will cancel its "money-losing" HMO contracts, including one that covers dependents of Stanford graduate students, the San Jose Mercury News reports. The university notified graduate students with dependents earlier this month that the new health plan for dependents will be a preferred provider organization that will have higher monthly premiums and will "probably" have higher out-of-pocket costs, such as deductibles. The change could raise premiums by as much as 60% (Konigsmark, San Jose Mercury News, 7/19). About 250 Stanford graduate students with dependents are insured through the university (Mason, AP/Contra Costa Times, 7/22). The 7,700 Stanford graduate students without dependents are covered under a student plan that will not be affected by the change (San Jose Mercury News, 7/19). A flier that accompanied the letter to the graduate students with dependents "detail[ed] public assistance plans available for low- or middle-income families in Santa Clara County" (AP/Contra Costa Times, 7/22). Students were "appalled" at the university's suggestion that they use a public assistance program to provide care for their families, the Mercury News reports (San Jose Mercury News, 7/19). The current plan, which will end Aug. 31, costs $75 per month for students and $122 for spouses. Coverage for one child costs $78, and students pay $111 for two or more children. Details of the new plan for graduate students with dependents are expected to be released this week (AP/Contra Costa Times, 7/22). Stanford's hospital system is expected to lose $40 million this year (San Jose Mercury News, 7/19).