Episcopal Press and News
Denominational health plan gets committee endorsement
Episcopal News Service. July 9, 2009 [070909-05]
Mary Frances Schjonberg
The 76th General Convention committee on the Church Pension Fund unanimously recommended on July 9 the implementation of a denomination-wide health insurance plan by 2012.
Resolution A177 now goes to the House of Bishops for consideration.
The previous General Convention endorsed a proposal from the Church Pension Fund to study the feasibility of such a plan. The fund said in its Blue Book report to the Anaheim meeting that $134 million could be saved in the first six years after replacing the current voluntary and fragmented system with one mandatory plan run by the fund. The report also suggested that such a plan would mitigate inequities between lay and clergy employees and would give all employees better access to insurance.
Fund President Dennis Sullivan told the committee during its open hearing earlier that day that the plan would also position the church "to take full advantage of national healthcare reform."
Many witnesses supported the plan, but some told the committee that they feared it would cost them and their congregations and dioceses more money and reduce their benefits. Sullivan responded that he and the fund would not support the plan if it increased costs and reduced benefits. He also suggested that people calculating those changes were not making correct comparisons of plans.
Sullivan acknowledged that two to five percent of people might be hurt by the change. He said the fund believes it can find way to mitigate those expected cost increases or benefit reductions.
The committee heard contrasting concerns from some of its witnesses.
The Rev. George Parmeter (South Dakota) told the committee that 18 people are in his diocese's plan and that providing him insurance will cost his parish $37,000 this year, "which is the same amount as my salary."
"It means to us -- the passage of this plan -- survival," he said.
The Very Rev. Catherine Thompson (Western Louisiana) said that the proposed plan would triple her family's health insurance from $8,000 to $24,000, "therefore making my congregation unable to support a full-time clergy person." Thompson said she was told that the increase was related to being a young clergyperson in a diocese composed of older priests.
"We are not going to allow to the best of our ability any situation in which a tripling of costs is incurred," Sullivan told the committee.
The Episcopal Church Medical Trust, a part of Church Pension, currently administers approximately 20 insurance options for 78 of the church's 110 dioceses. There are another nearly 60 plans being used by 20 dioceses not in the medical trust. The cost of Episcopal Church employee healthcare benefits will increase 9.5 percent next year, according to the fund's Blue Book report. The 2010 cost, $12,343 per cover employee, could equal 10 percent of congregations' pledge and plate income, the report said.
The proposed plan would allow individuals to decline coverage in some circumstances, but members of the Diocese of Los Angeles' deputation asked for that option to extend to congregations and dioceses as well. The deputies said that their congregations would see huge increases in costs and changes and who could be covered.
The Rev. Ed Bacon (Los Angeles) said his parish, All Saints in Pasadena, would see its costs increase from $200,000 to $400,000. Five employees would have to be laid off, he said, and the parish's mission would have to be cut.
Sullivan, who offered to meet with any deputation or individual to discuss their specific cases, questioned the Los Angeles deputies' conclusions.
His colleague Jim Morrison later told the committee that he met with Bacon and learned that his parish did not participate in the diocese's health plans and thus it had not received "an apples-to-apples comparison" of its plan and the proposed one. Morrison said Bacon will get such a comparison, which he believed would show that the proposal will be "equal to or better than in terms of plan design and cost."
Bacon will join a meeting the Diocese of Los Angeles will have with Church Pension staff July 10 to discuss their concerns about the impact of the proposed plan.
During the open hearing, Bacon had asked for "some dialogue before the deal is signed about really looking at the impact on mission."
Sullivan replied "we share the same concern about mission," adding that "the whole point of this from the beginning was to address one of the single-most difficult problems that we see the church facing … the cost of the health care."
Sullivan indicated that he would not support a diocesan or congregational opt-out option. However, he repeatedly told the hearing that Church Pension envisioned a system that would evolve just as the fund's clergy pension plan has changed since it began in 1914.
The resolution would "give the responsibility to the trustees of the pension fund and let them cope with the specifics over time," Sullivan said.
Under a denominational health plan, premium costs would still differ across the church, Tim Vanover of the Church Pension Fund told the hearing.
"We pool all of our lives together as the church. We created banding pools -- risk pools -- within the [medical] trust," he said, describing how diocesan-specific premiums for all of the insurance options would be set by taking into account the geographic cost of health care, the demographics of the group and provider discounts that might be available.
The plan would apply only to the domestic dioceses of the Episcopal Church. Sullivan told the committee that the fund plans to have determined how to include overseas dioceses by the next General Convention in 2012. Those dioceses include Colombia, the Convocation of American Churches in Europe, Central Ecuador, Dominican Republic, Haiti, Honduras, Litoral Ecuador, Micronesia, Puerto Rico, Taiwan, Venezuela and the Virgin Islands.