Why Do Organizations Like Oregon State University Change their Employees’ Health Insurance Plans?
Across the United States, public institutions are quietly changing employee health insurance programs in ways that raise costs, reduce coverage, and threaten the well-being of their workers. On October 1st, 2025, Oregon State University (OSU) Graduate Students’ health insurance switched from Pacific Source to Cigna Healthcare. This came less than a year after the Coalition for Graduate Employees’s (CGE) weeks-long strike to negotiate better wages. According to CGE members, this decision was made without CGE’s input or consent.
Administrators may frame this change as a cost control measure or a comparable shift, but the students and employees who depend on their employer's health benefits can feel a different effect. As graduate student and CGE member Matt Vannini said, "When OSU changed the graduate health insurance plan from Pacific Source to Cigna, no feedback was requested or given to the graduate employees. We did not even know that OSU was considering a change, until we were notified that the change had happened. For something that has such a large impact in our lives there should at least be a conversation before."
This isn’t just a financial issue, it’s about a lack of cooperation and accountability. At institutions across the country, health care is being treated as another expense, not a basic right.
Why Large Organizations Change Healthcare Benefits
1. Rising costs and financial pressure
Health care inflation is a serious issue. Many analysts project that commercial health costs could rise nearly 10% per year through 2026, with hospitals and pharmaceuticals companies driving most of that increase (McKinsey). Universities often respond by passing those costs to employees instead of demanding better deals from insurers or reforming the delivery system. As a symptom of a flawed healthcare system, rising costs are a signal of the need to change to a system that is not dependent on profit margins.
2. The “benefits as business” mindset
Large employers have increasingly taken an “activist role” in managing benefits, treating them as a tool for financial optimization rather than as a commitment to their employees. In practice, this means adjusting deductibles, limiting provider networks, or outsourcing administration to cut costs, even when it harms employees’ access to care (McKinsey). This manifests itself in “lateral” healthcare shifts that on paper look harmless but in practice disrupt employees' access to benefits.
3. Lack of transparency
Health insurance decisions are often made behind closed doors, through deals between HR departments, consultants, and insurers. Employees rarely see the fine print until a decision has been made. Without union oversight or transparency, it becomes far too easy for institutions to erode coverage and hide behind complicated language while claiming cost neutrality.
4. Shifting costs onto workers
Rather than cutting administrative bloat or executive salaries, many institutions take the politically easy route:
● Higher premiums and deductibles
● Narrower provider networks
● Increased co-pays or reduced mental-health coverage
These “soft” cuts may look minor on paper but have huge effects for people who depend on their employer-sponsored healthcare programs.
According to Vannini:
"While theoretical access to mental health care was preserved in the transfer from Pacific Source insurance to Cigna, practically a large number of graduate employees lost access to their therapists. Many providers who accepted Pacific Source do not accept Cigna, meaning graduate employees could not continue with the same therapists. Unlike other forms of health care, staying with a chosen therapist is essential to successful treatment. Worse still, finding providers who would accept Cigna has been difficult due to the general shortage of therapists in the area. The result is an increased mental health strain for the graduate community."
Cutting or changing the mental healthcare coverage for an entire workforce at OSU can have impacts beyond the student workers themselves. By forcing people to depend on employer-sponsored plans, workers’ access to healthcare is at the mercy of financial convenience.
Fighting Back: What workers and advocates can do
1. Organize and build collective power
Individual complaints rarely move bureaucracies. Collective action does. Whether through unions like CGE, staff councils, or coalitions between organizations, advocates must speak with one voice about the human cost of healthcare cuts.
2. Demand transparency
Request open access to cost analyses, actuarial data, and vendor contracts. Push for clear public benefit forums where staff can question administrators directly. Ask questions when answers are unclear (LegalClarity).
3. Enforce disclosure laws
If notice timelines or disclosure rules are violated, file formal complaints. Even small procedural wins can stall harmful rollouts. For more information, follow this link to the Department of Labor webpage (ERISA).
4. Engage state legislators and oversight boards
Public universities answer to taxpayers. Contact state education committees, local representatives, and labor boards to demand oversight of employee benefit changes at state-funded institutions.
5. Reframe the conversation
If administrators talk about “cost control.” Advocates should respond: “Whose costs?” When premiums rise or coverage shrinks, the “savings” come from workers’ paychecks and worsened health outcomes. Change the conversation from efficiency to exploitation (LegalClarity).
6. Propose more equitable alternatives
There are better ways to control spending:
● Value-based contracts with providers
● Transparent pharmacy pricing
● Preventive care initiatives
● Shared-risk insurance pools among public employers
● Income-based premium structures
Large employers testing such innovations often achieve cost stability without harming coverage when it is done equitably and transparently (McKinsey).
7. Prepare for legal and media action
If all else fails, use legal recourse and public pressure. Filing with the Department of Labor, contacting reporters, or organizing a collective grievance can bring visibility and sometimes reversal of bad policy changes.
The bottom line
The decision to cut or dilute health coverage is not inevitable. When any large institution trims health benefits, it chooses to balance its books by short-changing its workers. Every person deserves access to comprehensive, affordable care, especially at publicly funded institutions. If your employer is changing your health plan or cutting benefits without transparency there are ways to fight back.
Reach out to Mid-Valley Health Care Advocates to get help in understanding your rights, organize with others, and fight for a fair system that puts people before profits.
Citations:
Employee Rights and Recourse in Health Insurance Changes - LegalClarity
ERISA | U.S. Department of Labor