University to Help Offset Health Insurance Costs

Stanford University said Wednesday it will use school funds to offset soaring health insurance costs that have prompted the elite institution to suggest that students with dependents consider other coverage options--including welfare.

Stanford officials would not say exactly how much the university will contribute, nor would they identify which fund will supply the money. Angry students had suggested that Stanford tap into its $8.6-billion endowment, the nation’s fourth-largest.

With the university’s contribution, premiums for dependents will increase about 20% beginning Sept. 1--still steep but less than the nearly 60% rise administrators had warned students to prepare for.

The problem arose after Stanford’s teaching hospital decided in May to end certain kinds of contracts with HMOs. Facing a projected loss of $40 million this year, the hospital said the move was necessary because the old deals called for the HMOs to reimburse hospitals and doctors a flat monthly fee, even if that amount was less than the cost of the services provided.