Questions about Health Insurance in the Episcopal Church

I just got a nice mailing from the Church Pension Fund regarding the proposed legislation that would create a single national health plan for Episcopal Church employees. As of the moment each diocese (and in some places each parish) makes their own arrangements. In some cases the diocese decides to use the health insurance plans offered by the Pension Group. That’s what we do here in Arizona. In other cases dioceses make their own arrangements with insurance companies or encourage their parishes to do the best they can do on their own. That was my experience in my previous three dioceses.

The upshot of the patchwork system is that the health care benefits one is offered aren’t always exactly the same. It’s not been a real issue for us yet, but I imagine it could be. I have noticed that our vision and dental plans are different here in Phoenix than they were in the Diocese of Bethlehem. (They’re not as good here where we are enrolled in the national plan as they were in Bethlehem where we were enrolled in the state Chamber of Commerce plan.)

The downside though of finding your best deal on your own is that someone is going to have to be the plan administrator. In the case of my last parish, that someone was our assistant priest because she had the most experience of anyone on the staff in dealing with such situations. If it hadn’t been for her in a couple of insurance snafu situations I don’t know what we would have done. I certainly couldn’t have done what she managed to do - and that was true for most of the other parishes in the diocese. We had it pretty good because we had Mother Laura. Other places that didn’t have her had the experience of routine coverage being denied and claims being denied without the tenacious Mother Laura to make their insurance companies back down.

So, in principle, I am in favor of the national plan resolutions. It would create a single experienced advocate office for those of us needing help navigating the corridors of the insurance mess. It would give standard benefits to all the clergy across the country. And it costs, apparently, a little bit less.

But it’s only a little bit less. For us in Arizona, according the nice mailing I mentioned above, we’re looking at about 3% savings or so. That’s nice. But it’s not that big a deal for most of us.

What I don’t have is a sense of whether or not our health insurance is going to increase at the same rate it has been increasing. It’s now something like 20k to insure a family. That’s a real stretch for a small parish trying to hire a priest when you add that to salary, housing and pension.

The other thing is the savings are calculated on the basis of just the clergy who are presently enrolled. But, if the legislation passes as written, that group is going to be joined by a group of full-time lay employees who will now be mandated by canon to receive coverage comparable to what the clergy receive. That’s not a change for us here at the Cathedral in Phoenix since that’s already the case. But it will be a huge stretch for a number of parishes that are not now making that available. Suddenly they may be looking at something between an additional 10k to 20k cost per full-time employee. 

In a season of budgetary pressure, that may be a serious issue for a number of parishes already running in the red.

I wish the nice mailing told us how much the bottom line bill would increase if the new lay employee coverage was factored in. It might not be too much. It might be much more than I think. I just wish I knew that before I vote on the resolutions in the coming weeks.

Comments

[ruidh]

I know Mother Laura. She's a long-time friend.

In addition to the administrative ease, a larger group can get a better price for insurance. Part of the cost for insurance is expected loss plus risk margin. An individual requires a larger rik margin. The variance of expected benefit is proportional to the square root of n, the number of people covered. Since variance is risk, putting lots of people into a group makes the total benefit cost more predictable (lower variance) with a corresponding decrease in risk loading.

This is a marvelous idea. The difficult part is the allolcation of cost to different regions. Some parishes may see their clergy insurance cost increase even while the average cost for the entire church decreases.

[John B. Chilton]

Nick,

You are referring I suppose to the recent mailing from CPG, Serving the Church in a Season of Change.

In Appendix A p. 2 the question is framed as a social justice issue: "Perhaps it is time for the Church to remember the words of our baptismal covenant and require pensions [I'm suggesting by the same argument health insurance could be inserted here] for its lay employees, just as it does for its clergy employees -- as a matter of justice and dignity and a step toward parity for all persons who serve the church. [Appendix B is the appendix that goes into more detail on health insurance.]

As you observe a requirement to insure lay employees would impact the budgets of churches that have not voluntarily insured their lay employees. I want to underscore that the response of many of these churches is likely to be to reduce their number of employees or cut hours of individuals so they are treated as part timers not subject to the mandate. Ex post you may have achieved parity, but it would be a stretch to call the consequences justice or dignified.

As far as how fast premiums would increase year-to-year my guess is tha in the long run just as fast they would if the national plan does not come into effect -- general health care inflation will dictate that. The difference, I think, is what will happen in the short term. I tend to believe the CPG's analysis [even setting aside the effect of a possibly healthier lay group, you've got administrative savings, buying power savings...] that over the denomination as a whole the average premium initially to a jump down, perhaps several jumps down as the plan rolls out in the first couple of years.

Your mileage may vary of course -- That is to say, some dioceses will greatly benefit, others less so, and some may even end up worse off (CPG seems to be saying premiums will vary regionally and that no where will premiums go up, but you would be losing your freedom to leave the plan if it suits you later). (I should add that if I recall correctly dioceses would remain free to subsidize premiums to parishes, but to discriminate the subsidy between clergy and lay.)

I will interested to see if the vote on the resolution follows rather narrow economic interests or not.

[Nicholas Knisely]

Thanks John and ruidh. I would have thought this resolution was going to be a slam dunk a few months ago. But the more I look at it, the more questions I have.

The upshot for my situation is that this will save us a little money. The coverage has been great.

The big question that I'm not hearing other people discuss is the net effect of including lay employees by mandate. Admittedly we already do that here at the Cathedral, and we were already doing it in my last parish, so again, in both places, the upshot is a drop in total expense.

But there are a number of place around Arizona, for sure back in Bethlehem and I expect in a bunch of other dioceses where this is going to be a real stretch.

[John B. Chilton]

Tooting my own horn here's what I wrote about the plan a year ago:
http://www.episcopalcafe.com/daily/episcopal_church/the_churchwide_healthcare_feas.php

For those who didn't get it in the mail here is "Serving the Church in a Time of Change":
http://download.cpg.org/home/about_us/pdf/report_general_convention.pdf

This document
http://download.cpg.org/home/about_us/pdf/DHP_HOB08.pdf
says (p.13),

QUOTE/
Goal is for all employees to have the same or better benefits under the proposed DHP plans

The financial impact goal is that the cost to dioceses should be positive or cost-neutral
/UNQUOTE

Finally, isn't it interesting that you're echoing what national polls surrounding the health insurance debate say: people who have health insurance like their plan and don't what it to change.

[Nicholas Knisely]

Finally, isn't it interesting that you're echoing what national polls surrounding the health insurance debate say: people who have health insurance like their plan and don't what it to change.

Actually my concern is more with "unfunded mandates" than it is changing the plan. My plan would hardly change at all.

For what it's worth, I'm probably going to vote "yes" on the resolutions. I'd just like to be able to know in advance what the change is going to be for folks who are unaware of the full ramifications.