The rising cost of health care is among the reasons Penn State is asking for $334.8 million from the state, an increase of $17.6 million from the amount the university received last year.

Penn State spokesman Tysen Kendig said the university expects a 15 percent increase in health insurance premiums next year and has included that cost increase in its 2005-06 state appropriation request.

In 2002-03, the university spent more than $204 million on employee benefits. Penn State is requesting about $25 million more than last year to pay for employee benefits. But the request for more money for benefits is only part of the increased amount the university is requesting from the state.

Tuition will increase 5.8 percent next year if Penn State receives the appropriation it requests. If the state Legislature appropriates less than $334.8 million, tuition will increase more than 5.8 percent.

"The university is funded through two sources of income: appropriations and tuition," Kendig said. "If the state appropriations don't cover the costs, tuition will have to cover the gap."

But Kendig added that the university mission would not suffer.

"We're not going to erode quality of education we provide," Kendig said.

In July, Penn State President Graham Spanier told the Penn State Board of Trustees that the increased benefit costs were a priority.

"Increases in employee-related items like health insurance have a greater impact on universities than most other businesses because we have a larger percentage of our total budget in people," Spanier said.

PriceWaterhouseCoopers, an advisory company that provides corporate services including accountability and risk management, reported in April 2002 that health care premium costs rose 13.7 percent.

Reasons include increases in premiums, hospital bills and programs like chemical dependency treatment coverage and routine dental services that are mandated by the government. Kendall Marcocci, communications director for HealthAmerica, one of Penn State's insurance providers, said that although those numbers are old, the reason health care costs are rising have not differed much since the 2002 report.