Annual health insurance premiums for faculty and staff vary by more than $5,000 per employee across Texas universities, according to a new report from Rice University’s Baker Institute for Public Policy. For PPO (or POS plans) — the only plan type offered at every institution in the sample — the report finds that the total annual cost of individual coverage, combining employer and employee contributions, ranges from $8,095 for Texas universities belonging to Employees Retirement System of Texas (such as the University of Houston) to $15,742 at Trinity University.
The report, “Texas Universities Show Sharp Differences in Health Insurance Premiums,” examines plan characteristics for the 2025-26 academic year across Texas colleges and universities enrolling at least 1,000 students. The employee’s share of individual plan costs diverges sharply as well — from $0 for ERS and University of Texas to $3,993 at Trinity University. For family coverage, total annual plan costs range from $23,037 to $48,636, and more than half of plans require employees to contribute over $10,000 toward that cost.
“The disparities we found across Texas universities are striking, and they matter enormously to university budgets,” said Vivian Ho, the James A. Baker III Institute Chair in Health Economics. “Higher insurance costs for faculty and staff can translate into higher tuition for students and less money available to fund wage increases.”
The report also evaluates actuarial value — a standardized measure of how much of a patient’s medical costs a plan covers — finding a range from 0.815 at Southern Methodist University to 0.88 at Rice. That difference of 6.5 percentage points translates to roughly $400 more in annual out-of-pocket costs for an employee with average medical spending.
“Each of the universities in our sample provides lower cost options for insurance coverage, such as HMOs or high-deductible health plans,” said Marah Short, a scholar in health economics at the Baker Institute. “But the PPO/POS plan is popular for personnel as they age and face higher risks of illness.”
The authors hypothesize that insurer market share, hospital consolidation and multi-institution bargaining power are key drivers of variation. Blue Cross Blue Shield of Texas controls roughly 60% of the PPO market in the state and negotiates provider rates for the two lowest-cost plans — those offered through ERS and the UT System, which are also the largest employer groups.
The project was supported by the Sid Richardson Endowment Fund at the Baker Institute. The full report is available at bakerinstitute.org.