Conferences get creative to address rising health care costs
Jun. 22, 2006 News media contact: Linda Green * (615) 7425470* Nashville {380}
NOTE: Photographs and related stories are available at http://umns.umc.org.
A UMNS Report By Neill Caldwell*
The Rev. Harold Fuss, 81, is typical of many retired United Methodist pastors. He retired in 1990, after having served active parish ministry for 44 years. He received his first appointment in the former Baltimore Conference at age 18 and devoted his life to the church.
Fuss, of Roanoke, Va., has Parkinson's disease and back problems that will soon require surgery. As a result of his ailments, he's on some very expensive medications. The health care benefits offered through the United Methodist Church's Virginia Annual (regional) Conference picks up what Social Security doesn't cover, and he's happy about how things are working out.
"I'm very satisfied with my dealings with the health care insurance company, and have been real pleased with the way the annual conference has treated us old fellows," he said.
That the Virginia Conference and others across the United Methodist Church can continue to provide health care coverage stems in part from the financial participation of Fuss and the many other retirees who receive benefits.
"I pay in about $100 per month," Fuss said. "If we send our prescriptions in through the mail, we pay a very, very reasonable price for those. For example, I just had one of my major medicines filled and only paid $8 for it."
Rising health care costs and retiree medical expenses are squeezing budgets across the church. As annual conferences face the growing costs - and a greater number of participants - they've had to adopt some creative strategies.
"The cost of health care insurance is at a crisis point for the nation, not just the church, says Randy Casey-Rutland, interim treasurer for the Florida Conference. "I'm sure many of the people who sit in our pews are facing the same problem. It's no different."
The Virginia Conference has the largest health care plan in the denomination, with coverage for both clergy and many lay people, said Don Rogers, executive director for Virginia United Methodist Pensions Inc.
"I think there is a real misunderstanding about the costs of health care," he said. "There's a lot of screeching about what we have to pay, what we have to apportion, with the inference that that's what the cost is. But in Virginia, we're subsidizing health care costs with reserves we've built up over the years. We don't have a silver bullet, but we have been very deliberate about planning," Rogers said.
Many annual conferences have responded to the health care issue by asking their active and retired clergy members to shoulder more of the premium costs. The Wyoming Conference (in New York and Pennsylvania), for example, increased the minimum salary level for clergy to help offset rising costs.
The North Georgia Conference has addressed its clergy retiree health care benefits through consultation with AON Consulting. "The valuation of our liability and the manner in which it is to be handled were parts of the work done," said Ed Tomlinson, executive assistant to the bishop in North Georgia.
In North Georgia's plan, those who retired after Jan. 1, 2005, share costs with the annual conference by percentages based on their service. At 35 years or more, the participant pays 20 percent of the cost. Lesser service in five-year increments raises the percent of cost to the participant until, at less than 10 years, the retiree pays 100 percent. Those who retired with all of their service before 1982 have 100 percent of costs paid by the conference. Those who retired between Jan. 1, 1983, and Dec. 31, 2004, will pay 10 percent of the cost through 2008, 15 percent through 2012, and 20 percent thereafter.
Florida, which has one of the largest retiree populations in the connection, brought its retirees into the discussion and they helped design their plan, with the understanding that they'd have to put in more contributions themselves so that the plan would survive.
"The Florida Annual Conference has been sensitive to this issue for several years and has tried to address it in various ways," said Casey-Rutland. "We've worked to include our retired clergy in these conversations and help craft our decisions. We've had the commitment of our retirees to be strongly supportive of conference efforts to examine the funding needs of retired clergy health insurance. But the key was discussing these changes with our retirees and getting their input for both long-term and short-term thinking." The conference also set aside $1.5 million to subsidize the cost of retiree health care coverage.
"So right now we have a combination of three things: participation by our clergy, an annual apportionment of 3 percent a year, and this pool of $1.5 million, which acts as a subsidy," Casey-Rutland said. "These three factors provide an adequate funding stream ... for the short term."
"Our workable solution in Florida involved some luck," Casey-Rutland continued. "We had this pool of money which was not set aside for this purpose that we could dedicate to this plan, which was fortunate, or plain dumb luck.
"We also had retired clergy who were willing to make life-long changes in the way they pay for health insurance, and clergy who were willing to provide the leadership needed in making that change. So there are a number of factors that have blessed Florida that might not work everywhere."
*Caldwell is a freelance writer based in High Point, N.C.
News media contact: Linda Green, Nashville, Tenn., (615) 742-5470 or newsdesk@umcom.org.
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United Methodist News Service Photos and stories also available at: http://umns.umc.org
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