Church insurance providers fear health-care reform
Like most health-care executives, O.S. Hawkins is keeping a close eye on Congress these days. And he’s not sure he likes what he sees. Hawkins is president of GuideStone, the Southern Baptist health insurance and pension plan for ministers. He’d like to see health-care costs cut but fears reform might unintentionally put GuideStone and other denominational insurance plans out of business.
Hawkins was in Nashville last month for a meeting of Southern Baptist Convention leaders. He told them health-care reform is a major issue for the Church Benefits Association, made up of more than 30 denominational plans. That’s especially true for the possibility of a government-sponsored public option for health care, Hawkins told Baptist leaders.
“If this program goes through that the president wants to go through, there won’t be any of us that will have a health insurance program,” Hawkins told Baptist leaders. “You can’t compete with somebody else who doesn’t have to not just make a profit, but doesn’t even have to break even. …”
For decades, denominations have run health-care plans. They allow local churches — most of which function like small businesses — to get affordable insurance. The plans often offer low deductibles and extensive coverage, spending as much as 90 percent of the premiums collected on health care.
“We exist to take care of church workers,” said Jim Sanft, president of Concordia Plan Services, the Lutheran Church-Missouri Synod’s benefits provider. “Our primary purpose is to pay out benefits.”
Like most insurers, Concordia, which insures about 50,000 church workers nationwide, has been beset by the rising cost of medical care. That means higher rates for ministers and church workers.
“I think everyone agrees that costs are going up — and we feel a little bit helpless,” he said.
Sanft would like to see health-care reform that keeps costs in checks. But some of the proposed changes concern him.
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Take tax credits for buying health insurance. Because churches are nonprofits and don’t pay federal taxes, they wouldn’t be eligible for tax credits. To get those credits, pastors might quit the church plan and buy a cheaper plan elsewhere. That would leave the church plan with a smaller pool of ministers, who would most likely be older and sicker, and costlier to insure, Sanft said.
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Sanft also is concerned that Concordia might be required in the future to pay for procedures like abortion. “We don’t want to pay for something that our church is completely opposed to,” he said.
Rising costs have led some churches to leave their denominational plans. Our Savior Lutheran Church in Nashville left Concordia several years ago, mainly to save money.
The church operates a private school, said the Rev. Philip McLain, pastor of Our Savior. It buys insurance from BlueCross BlueShield for about 15 employees. “It’s one of our largest costs,” he said.
Required plan cuts costs
To cut health-care costs, the Episcopal Church recently changed from an optional health-care plan for churches to a required one. All Episcopal parishes, dioceses and other institutions now must get their insurance through the denomination’s Medical Trust.
The reason for the change in simple, says Jim Morrison, executive vice president of the Church Pension Group, which oversees the Medical Trust. It will save money.
In the past, about 80 percent of Episcopal dioceses were part of the plan. With all 101 dioceses required to participate, the pool of employees rose to about 50,000. The premiums go to the Medical Trust, which then uses other health insurance companies to administer benefits. More people means the Medical Trust can negotiate lower rates.
Having a required health-care plan will allow the Medical Trust to respond to health-care reform.
“We feel like we are in the best shape possible to be nimble and to respond to whatever comes out of Washington,” he said.
Church health-care plan administrators also worry about more government regulation, and about plans being labeled as “Cadillac” insurance plans. That’s because the plans cover extensive care, often with low deductibles. Such plans may be taxed heavily under some proposed reforms.
Timothy Vanover, vice president of the Church Pension Group, said that church plan administrators are trying to work with government officials to keep their plans from being labeled as Cadillac plans. He says the church health plans offer many benefits because they exist to keep church workers healthy. Taxing them for that would be a punishment for good deeds.
Besides, he said, many church workers often make little money.
“You can’t ask a nun, who has no money, to pay a $2,000 deductible,” he said.Take tax credits for buying health insurance. Because churches are nonprofits and don’t pay federal taxes, they wouldn’t be eligible for tax credits. To get those credits, pastors might quit the church plan and buy a cheaper plan elsewhere. That would leave the church plan with a smaller pool of ministers, who would most likely be older and sicker, and costlier to insure, Sanft said.anft also is concerned that Concordia might be required in the future to pay for procedures like abortion. “We don’t want to pay for something that our church is completely opposed to,” he said.
Rising costs have led some churches to leave their denominational plans. Our Savior Lutheran Church in Nashville left Concordia several years ago, mainly to save money.
The church operates a private school, said the Rev. Philip McLain, pastor of Our Savior. It buys insurance from BlueCross BlueShield for about 15 employees. “It’s one of our largest costs,” he said.
Required plan cuts costs
To cut health-care costs, the Episcopal Church recently changed from an optional health-care plan for churches to a required one. All Episcopal parishes, dioceses and other institutions now must get their insurance through the denomination’s Medical Trust.
The reason for the change in simple, says Jim Morrison, executive vice president of the Church Pension Group, which oversees the Medical Trust. It will save money.
In the past, about 80 percent of Episcopal dioceses were part of the plan. With all 101 dioceses required to participate, the pool of employees rose to about 50,000. The premiums go to the Medical Trust, which then uses other health insurance companies to administer benefits. More people means the Medical Trust can negotiate lower rates.
Having a required health-care plan will allow the Medical Trust to respond to health-care reform.
“We feel like we are in the best shape possible to be nimble and to respond to whatever comes out of Washington,” he said.
Church health-care plan administrators also worry about more government regulation, and about plans being labeled as “Cadillac” insurance plans. That’s because the plans cover extensive care, often with low deductibles. Such plans may be taxed heavily under some proposed reforms.
Timothy Vanover, vice president of the Church Pension Group, said that church plan administrators are trying to work with government officials to keep their plans from being labeled as Cadillac plans. He says the church health plans offer many benefits because they exist to keep church workers healthy. Taxing them for that would be a punishment for good deeds.
Besides, he said, many church workers often make little money.
“You can’t ask a nun, who has no money, to pay a $2,000 deductible,” he said.
