wfn.org | [PCUSANEWS] BOP will increase some health-insurance rates in

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

Note #7999 from PCUSA NEWS to PRESBYNEWS:

BOP will increase some health-insurance rates
03472
November 5, 2003

BOP will increase some health-insurance rates in '04

Better news: Investment income is up 16 percent for past 9 months

by Jerry L. Van Marter
and Karen Babik, Board of Pensions

SANTA FE, NM - The skyrocketing cost of medical care has forced the
Presbyterian Church (USA) Board of Pensions (BOP) to raise subscription rates
for several of its health-care insurance programs.

The increases, approved during an Oct. 25 meeting here, will go into effect
on Jan. 1.

On a more encouraging note, the board learned that its investment portfolio
realized a 16.1 percent return for the first three quarters of the year. If
the market holds up, the positive return - after three years of stock market
losses - will enable the board to rebuild its contingency reserve.

"We need to be realistic about the investment challenges we face in the
balance of this decade," said Richard Young, chair of the BOP's Investment
Committee. "If the Plan closes the year with a 15 percent return, the
compound annual return for the 10 years ended Dec. 31, 2003, will be 8
percent, exactly in line with actuarial expectations. This is very good."

Young warned, however, that "the negative returns of 2000-2002 will continue
to be a part of the long-term returns (calculation) in the decade ahead. This
is not very good."

He said it is "unlikely we will again see the returns we had from 1995-1999
to offset the losses of 2000-2002."

Conceding that making predictions about the financial markets is "risky and
maybe unwise," Young said: "I think we can predict that the double-digit
stock market performance and experience apportionments of the 1990s will not
be repeated in the next decade."

Experience apportionments are percentage increases in pensions of retired BOP
members and pension credit increases for active members. They are based on
the market performance of the board's investment portfolio. Several
double-digit apportionments were granted during the boom years of the 1990s.

BOP officials blame ever-rising health-care costs on improving medical
technology, a relaxation of managed-care controls, increasing demand from an
aging population, tough negotiating by hospitals and physicians, and rising
costs for prescription drugs.

Health-care costs are expected to increase 12.5 percent next year, matching
the  assumptions the board used in setting dues and benefit changes for 2004.

John Cookson, of Milliman USA, the BOP's medical-plan actuary, told board
members: "If current trends continue, even with the best estimate, the
projected net loss on reserves could be about $10 million in 2005."

The board's Healthcare Committee plans to meet in January to consider the
implications for the BOP Medical Plan.

As of the first of the year:

* Monthly Medicare Supplement subscription dues will rise from $160 to $190
for each participant, excluding those in the Affiliated Benefits Program;

* Monthly Medical Continuation dues will go up from $206 to $235 for those
enrolled before 1987, and from $354 to $400 for those first enrolled later;

* Monthly rates for the Affiliated Benefits Program will be $625 for early
retirees and $230 per participant in the Medicare Supplement program. Medical
Continuation rates for Affiliated Benefits Program participants will be $352
for a member, $510 for a member with children, $724 for a member and spouse,
and $921 for a member with a family.

The board also increased the income target levels for Income Supplement
eligibility from $21,600 to $22,400 for single people and from $26,100 to
$26,940 for married couples. Those amounts are maximum incomes after a BOP
income supplement is added to other sources of income.

The BOP also approved a special Christmas gift for income-supplement
recipients of $200 for singles and $400 for couples. The Christmas-giving
custom began in the former Presbyterian Church in the United States (PCUS)
before Presbyterian reunion in 1983.

In other business, the board:

* Amended the Retirement Savings Plan so that ministers and commissioned lay
pastors who have part of their salaries designated as housing allowances may
withdraw funds from their 403(b) accounts to buy primary residences.

* Renewed its contract with International SOS for a year, beginning Jan. 1.
International SOS helps U.S. citizens traveling outside the country who have
medical emergencies or need local treatment.

* Approved the sale of the Morganwood (PA) retirement facility to Swarthmore
College. As part of the agreement, the college has committed to retain as
tenants every family who now lives in each home in Morganwood for a period up
to twenty years.

To subscribe or unsubscribe, please send an email to
pcusanews-subscribe-request@halak.pcusa.org or
pcusanews-unsubscribe-request@halak.pcusa.org

To contact the owner of the list, please send an email to
pcusanews-request@halak.pcusa.org