wfn.org | Rising Health-Care Costs Affect ELCA Health Plan in 2003

[News News <NEWS@ELCA.ORG>]

ELCA NEWS SERVICE

August 26, 2002

RISING HEALTH-CARE COSTS AFFECT ELCA HEALTH PLAN IN 2003
02-201-SS*

     MINNEAPOLIS (ELCA) -- Trustees of the Evangelical Lutheran Church
in America (ELCA) Board of Pensions approved 2003 pharmacy co-pay
increases for health-care plan members from $5 to $6 on generic drugs by
retail and $10 to $12 on generic drugs by mail at their July 31-Aug. 2
meeting in Minneapolis.  Preferred brand drugs by retail will move from
$12 to $20 and by mail from $24 to $40, and non-preferred by retail from
$27 to $40 and by mail from $54 to $80.
     David G. Adams, Board of Pensions vice president for research and
design, said the ELCA expects to spend more in 2002 for prescription
drugs than for inpatient hospital costs.
     The trustees' action is part of a cost-sharing plan designed to
slightly shift the balance for rising costs between congregations and
other sponsoring employers and the plan members.  The goal is for
members to pay 25 percent of the cost of prescription drugs.  Currently
members pay about 18 percent of pharmacy costs, which are rising more
than 20 percent annually.
     "One of the challenges of managing the ELCA health plan is dealing
with the tension that exists between the members' desire for better
benefits and the congregations' desire for lower cost," Adams said.  He
explained that the pension unit asked synod bishops to weigh in on the
challenge.
     "The majority of bishops favor shifting some of the increasing
cost to plan members.  Only one in five felt that congregations should
bear the entire cost of these future increases," said Adams.
     The trustees also approved 2003 contribution rates for the
health-care plan that show increases that will range from about 9
percent for congregations in "class one" areas and 16 percent for
congregations in "class six" areas, with an average increase of 11
percent.  The six-class rate structure is based on geographical
differences in health-care costs and salaries, with highest costs in
"class six" areas.
     "Total incurred claims for active members [in 2003] are projected
to rise from $79.7 million to $89.3 million, an increase of 11.9
percent," said Brad Joern, health actuary for the pension unit, when
explaining the proposed rate increase.  The ELCA health plan is a
self-insured plan, collecting what needs to be paid out in benefits to
plan members and families.
     Board trustees voted unanimously to retain New York-based
PricewaterhouseCoopers as independent auditor for the Board of Pensions,
a switch from Arthur Andersen.  In announcing the trustees' audit
committee choice and asking full board approval, committee chair David
Alvarez, Guaynabo, Puerto Rico, said, "In the past, selecting an auditor
was a routine matter. No longer."
     In other actions, trustees:
     + Endorsed a 2003-2005 strategic plan that embraces health and
wellness as well as affordability in its health-care plan.  "We need to
encourage our plan members to take personal responsibility" for their
health and wellness, said John G. Kapanke, president, ELCA Board of
Pensions.  He said some corporations have gyms and give lip service to
health and wellness, "but we need to go far beyond that."  Future board
discussions will determine just how far the plan will go.
     + Approved for transmittal to the ELCA Division for Church in
Society a response to the first draft of the ELCA social statement on
health, healing and health care.  The response document was crafted by
an ad hoc committee of trustees chaired by the Rev. James S. Aull, White
Rock, S.C.
     + Approved recommended design changes for the disability plan, to
improve the quality of outcomes for members receiving disability
benefits.  The ELCA Church Council will consider approving the plan
redesign at its November meeting.
-- -- --
     The ELCA Board of Pensions maintains rate-class and other
information at http://www.elcabop.org/ on the Web.

*Sonia C. Solomonson is managing editor for The Lutheran, magazine of
the ELCA.

For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html