From the Worldwide Faith News archives www.wfn.org
BOARD OF PENSIONS GREATLY EXPANDS HMO PROGRAMS
05 May 1996 08:38:15
95280 BOARD OF PENSIONS GREATLY EXPANDS HMO PROGRAMS
by Jerry L. Van Marter
PHILADELPHIA--Spurred by the success of five pilot projects, the Board of
Pensions (BOP) has authorized the establishment of Health Maintenance
Organizations (HMOs) in 22 additional presbyteries by the end of the year.
Initial results of the HMOs in the presbyteries of Chicago, Greater
Atlanta, Philadelphia, San Francisco and San Jose showed savings of between
24 and 37 percent by persons using an HMO rather than the board's indemnity
plan for major medical coverage.
Of the 22 new presbyteries, 12 are in California, where population
density and a highly competitive HMO market offer the highest cost savings.
Presbyteries where the board will be enrolling plan members in HMOs
this fall for start-up January 1 include Baltimore, Detroit, Grace,
Giddings-Lovejoy, Grand Canyon, Hanmi, James, Los Ranchos, National
Capital, Pacific, Pittsburgh, Redwoods, Riverside, Sacramento, San Diego,
San Fernando, San Gabriel, San Joaquin, Santa Barbara, Santa Fe, Stockton,
and Twin Cities Area.
John Cookson, a consultant to the board from the actuarial firm of
Milliman and Robertson, sounded the only note of caution. "My only
concern," he told the board at its Aug. 3-5 meeting here, "is that some
carriers will offer low-ball introductory rates and then submit hefty
increases on renewals."
Stephen Ballard, director of research for the board, responded that
such was not the case in Philadelphia, where the HMO is up for renewal
later this month. The board authorized renewal of HMO policies for 1996 at
a rate not to exceed a three percent increase over 1995.
In a related action, the board approved enrollment of plan members in
the state of Alabama in a Preferred Provider Organization (PPO)
administered by Alabama Blue Cross/Blue Shield. That PPO has the market in
Alabama "sewed up," according to board officials, precluding HMOs as an
option. The PPO arrangement affects plan members in the presbyteries of
North Alabama, South Alabama and Sheppards & Lapsley.
The success of the HMO pilots highlighted what continued to be a
remarkable turnaround for the board's major medical program. BOP
Healthcare Committee chair Beverly Dodson reported that the current fund
balance in the major medical program is $30 million. As recently as 1989,
the major medical program was $20 million in the hole.
With reserves continuing to climb, the board asked its staff to
conduct research to determine an adequate level of reserves to keep the
major medical program financially healthy.
In other actions related to the major medical plan, the board:
* deferred until its October meeting a proposal to overhaul the free
coverage provisions for plan members, their survivors and ex-dependent
children in times of transition (which currently provide 30, 60 or 90 days
of free coverage depending on circumstances).
* deferred until October consideration of alternate ways of funding
major medical continuation coverage for retired members, which is currently
funded by a portion of active dues.
* approved a change from Intracorp to United Healthcare for
utilization review services, effective Jan. 1, 1996; in addition to being
less expensive, United offers a 24-hour, 7-day "NurseLine," which provides
information and advice about medical treatment.
* discussed a questionnaire for to retirement plan members about
increased subscription rates for the medicare supplement program or benefit
In other favorable financial reports, the board learned from
Investment Committee chair James Tilley that the board's investment
portfolio earned a 12.5 percent return during the first half of 1995, and
President John Detterick said current projections indicate 1995 operating
expenses will come in $550,000, or 2.5 percent, under budget.
For more information contact Presbyterian News Service
Presbyterian Church (U.S.A.), Louisville, KY 40202
phone 502-569-5504 fax 502-569-8073
E-mail PCUSA.NEWS@pcusa.org Web page: http://www.pcusa.org
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