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Title: ELCA Pension Board to Raise Medical Premiums ELCA NEWS SERVICE August 14, 1998 ELCA PENSION BOARD TO RAISE MEDICAL PREMIUMS 98-29-170-RK MINNEAPOLIS (ELCA) - Noting health care costs nationwide are rising rapidly, the Evangelical Lutheran Church in America's Board of Pensions will raise contribution levels for the church's health plan in a range of 10 to 16 percent in 1999. The Trustees of the Board of Pensions met here Aug. 6-7. "As a unit of this church, we are sensitive to the financial impact escalating health benefit costs have on congregations and other ELCA employers. We are committed to exploring ways to limit significant increases in the future," said John G. Kapanke, Minneapolis, Board of Pensions president. The increase per plan member is determined by the amount of coverage (for an individual or family) and by defined compensation (members with higher salaries, in effect, subsidize those with lower salaries). This is the first significant increase in health care premiums since 1993. Last year contribution levels were up only an average of 3 percent. David G. Adams, vice president of finance, cited several factors in explaining the sharp increases. Medical claims for 1997 and 1998 are higher than previously estimated, which is consistent with national trends. Adams also noted pharmacy costs have risen nearly 20 percent, the aging of plan members (whose average age is 48), and the increased use of mental health benefits. Mary Alice Bjork, Salem, Ore., who chairs the board's benefits committee, said the rapidly rising health care costs are cutting into the plan's contingency reserve that is used to assure all future medical claims can be paid. Even with the premium increase, the reserve will end 1999 near the bottom of the board's target range. While raising rates, the board proposed a set of plan changes that would reduce costs and increase the level of some benefits. If approved by the ELCA Church Council in November, the plan would provide a prescription drug program for members not in managed care in 1999. This would give members 100 percent coverage after a $5 generic and $12 brand-name co-payment on supplies of 30 days or less. The board also proposed increasing the limit on covered expenses for routine physical exams to $240 and obstetric-gynecological exams to $120 every 24 months for members in standard benefits and those who go out-of-network. Another health plan change in 1999 would increase mail-order pharmacy co-payments to $8 for generic and $20 for brand-name supplies of 22-90 days. Even with this increase, Adams said the board's co-payments will be lower than the national average and less than 20 percent of the cost of an average mail-order prescription. In other board matters, trustees: - Continued discussion of strategic planning on health care, cost structure and service. - Entered into an investment advisory agreement with the ELCA Endowment Fund to continue managing its funds. - Decided to join several other denominational benefit boards to offer retired members local managed care plans as an alternative to traditional Medicare coverage within two years. For information contact: Ann Hafften, Director 1-773-380-2958 or [log in to unmask] http://www.elca.org/co/news/current.html