wfn.org | ELCA Pension Board to Raise Medical Premiums

[George Conklin <gconklin@wfn.org>]

ELCA NEWS SERVICE

August 14, 1998

ELCA PENSION BOARD TO RAISE MEDICAL PREMIUMS
98-29-170-RK

 MINNEAPOLIS (ELCA) - Noting health care costs nationwide are rising
rapidly, the Evangelical Lutheran Church in America's Board of Pensions will
raise contribution levels for the church's health plan in a range of 10 to
16 percent in 1999.  The Trustees of the Board of Pensions met here Aug. 6-7.
 "As a unit of this church, we are sensitive to the financial impact
escalating health benefit costs have on congregations and other ELCA
employers.  We are committed to exploring ways to limit significant
increases in the future," said John G. Kapanke, Minneapolis, Board of
Pensions president.
 The increase per plan member is determined by the amount of coverage (for
an individual or family) and by defined compensation (members with higher
salaries, in effect, subsidize those with lower salaries).  This is the
first significant increase in health care premiums since 1993.  Last year
contribution levels were up only an average of 3 percent.
 David G. Adams, vice president of finance, cited several factors in
explaining the sharp increases.  Medical claims for 1997 and 1998 are higher
than previously estimated, which is consistent with national trends.  Adams
also noted pharmacy costs have risen nearly 20 percent, the aging of plan
members (whose average age is 48), and the increased use of mental health
benefits.
 Mary Alice Bjork, Salem, Ore., who chairs the board's benefits committee,
said the rapidly rising health care costs are cutting into the plan's
contingency reserve that is used to assure all future medical claims can be
paid.  Even with the premium increase, the reserve will end 1999 near the
bottom of the board's target range.
 While raising rates, the board proposed a set of plan changes that would
reduce costs and increase the level of some benefits.  If approved by the
ELCA Church Council in November, the plan would provide a prescription drug
program for members not in managed care in 1999.  This would give members
100 percent coverage after a $5 generic and $12 brand-name co-payment on
supplies of 30 days or less. 
 The board also proposed increasing the limit on covered expenses for
routine physical exams to $240 and obstetric-gynecological exams to $120
every 24 months for members in standard benefits and those who go
out-of-network.
 Another health plan change in 1999 would increase mail-order pharmacy
co-payments to $8 for generic and $20 for brand-name supplies of 22-90 days.
Even with this increase, Adams said the board's co-payments will be lower
than the national average and less than 20 percent of the cost of an average
mail-order prescription.
 In other board matters, trustees:
 - Continued discussion of strategic planning on health care, cost structure
and service.
 - Entered into an investment advisory agreement with the ELCA Endowment
Fund to continue managing its funds.
 - Decided to join several other denominational benefit boards to offer
retired members local managed care plans as an alternative to traditional
Medicare coverage within two years.

For information contact:
Ann Hafften, Director 1-773-380-2958 or NEWS@ELCA.ORG
http://www.elca.org/co/news/current.html