Rising Health-Care Costs Affect ELCA Health Plan in 2003

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.

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