wfn.org | BOP portfolio down 4.4 percent

[PCUSA NEWS <PCUSA.NEWS@ecunet.org>]

Note #7354 from PCUSA NEWS to PRESBYNEWS:

25-July-2002
02267

BOP portfolio down 4.4 percent

Ever-rising drug costs forcing changes in medical-benefits program

by John Filiatreau

LOUISVILLE - The Board of Pensions (BOP) announced recently that, although the value of its investment portfolio declined by 4.4 percent in the first half of 2002, the Presbyterian Church (USA) pension fund is secure and will weather the current storms in the financial markets.

During its July 12-13 meeting in Philadelphia, the BOP board of directors also approved changes necessary to keep its medical-benefits plan financially sound.

The Rev. Richard E. Young, chair of the Board's investments committee, said PC(USA) pension programs are fully funded, meaning that there are enough assets to cover accrued and future benefits of all current members of the Benefits Plan.

However, unless the financial markets make a "truly amazing" recovery in the final two quarters of the year, Young said, the BOP portfolio may experience its third straight year of "negative performance." He warned that the Board may not be able to recommend an experience apportionment next year.

Board members noted that prescription-drug costs continued to rise sharply; in the first few months of 2002, they were up by 10 percent for the Medical Plan and by 15 percent for the Medicare Supplement Plan. Staff members said the cost of healthcare is continuing to rise at double-digit rates, largely because of increases in the cost of prescription drugs, and seems likely to keep rising in the near-term future .

To keep its Prescription Drug Program on sound financial footing, the Board adopted a new co-payment plan, to go into effect next Jan. 1, under which patients will be responsible for a percentage of the cost of medications, with minimum and maximum co-pay requirements for each prescription. The current annual co-payment limit of $2,000 (for active members, their families, and Medicare Supplement members) won't change.

The Board's healthcare committee recommended the adjustments with the comment that delaying action until the BOP's October meeting would be merely "postponing the inevitable." Members said further changes in the Medical Plan may be necessary in October.

The Board voted to stop offering fully insured HMO options, effective Dec. 31. It said it was taking the action because of the high cost and limited availability of HMOs and changes in the healthcare market; some proposed HMO renewal increases for 2003 are as high as 70 percent. Nearly all members of the Benefits Plan now will be covered by the BlueCard PPO program administered through Highmark Blue Cross Blue Shield.

In other business, the Board:

* Authorized a one-year renewal of its contract with Highmark Blue Cross Blue Shield for the BlueCard PPO program;

* Renewed the self-insured contract with Anthem Blue Cross of Kentucky for one year, with changes in 2003 to bring coverage levels in line with the BlueCard PPO;

* Approved Benefits Plan amendments extending free medical coverage from 90 days to one year for survivors (spouses and children) of active members who die; requiring medical-necessity reviews and pre-certification for outpatient mental-health services after 20 visits; eliminating a Medical Plan exclusion of treatment of illness or injury resulting from armed conflict; and defining more specifically what constitutes "cosmetic" services;

* Changed its Retirement Housing Supplement Program guidelines to help retired church workers with housing expenses by making certain costs eligible for coverage; making income calculations as they are made in the Income Supplement Program; and increasing some levels of allowable assets; and,

* Voted to terminate a separate PPO benefit in Alabama, whose members now will receive benefits through the BlueCard PPO.

The changes all take effect on Jan. 1.
During the opening session of the meeting, the Rev. Fahed Abu-Akel, moderator of the 214th General Assembly, commended the Board for its work and challenged directors and staff to think long-range about the increasing diversity of the PC(USA). He noted that the BOP touches church workers' lives at pivotal times in their lives.

For more information about the Board's programs and the recent changes, visit the BOP Web site at www.pensions.org.
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