Four proposed changes in the conference’s health insurance plan are designed to reduce the plan’s costs and encourage plan participants to become more involved in their health care.

The proposed changes are not popular but action is necessary, said James Berner, the conference treasurer and director of administrative services.

The health insurance plan’s 2019 anticipated annual revenue is $7.1 million:

* $3.9 million would come from apportionments. Berner, who also serves as conference benefits officer and executive secretary of the board of pensions, said this amount hasn’t changed since 2015. The Board of Pensions is recommending that the amount remain unchanged this year.

The $3.9 million represents 31 percent of the $12.4 million in apportionment dollars the conference expects to receive in 2019. It is by far the largest expense (for details, see Page 185 of the Conference Workbook).

Raising the amount would mean increasing the apportionments local churches are asked to pay. That could be especially challenging for the 628 churches in the conference with 50 or fewer members.

* $3.2 million would come from premiums paid by churches and individuals. Premiums were last altered on Jan. 1, 2011, when changes required by the Affordable Care Act, also known as Obamacare, were implemented.

Berner noted that if premiums were increased, everyone in the plan would have to pay more, whether they use the plan or not.

Rising drug prices

The rising cost of prescription drugs is one of the major challenges the plan is grappling with, Berner said. Some drug prices are sky-high. Some examples: The New York Times has reported that Keytruda, a drug that can help lung cancer patients, costs $13,500 a month and Humira, prescribed for rheumatoid arthritis, reportedly costs $4,166 a month.

Of course if you have a life-threatening medical issue and there’s a drug that could save your life, you want that drug — regardless of the cost. The way the health care system works now, you probably do not know the cost and, even if you did, you might not care so long as the cost doesn’t directly affect you.

The conference’s health insurance plan limits the out-of-pocket amount participants have to pay for drugs to $7,350 in a plan year (April 1 to March 31). This limits participants’ expense but the health insurance plan’s expense is not as limited.

An incentive

One of the Board of Pension’s proposals would altar the price participants pay for some drugs.

Participants currently pay $35 per prescription. The Board recommends participants pay $35 or 30 percent of the cost of the prescription, whichever is greater.

It means that a prescription that costs $1,000 would require a participant to pay $300 instead of $35.

The proposed change would save the plan an estimated $360,000 to $450,000 annually, Berner said.

In addition to saving the plan money, the proposed change is designed to give participants an incentive to talk to their health-care provider and search for less expensive drugs, he said.

“Thirty-five dollars is not going to stimulate this person to go to their doctor and say, ‘I need to take something else,’ Berner said.

“You are going to have to take an active part in your health care because we cannot provide what we provided in the past,” he said.

Berner said that a little over 20 percent of the conference’s health insurance plan costs were attributable to drugs in 2017.

Other proposals

The Board of Pensions also is proposing:

* Raising the deductible for participants to $2,000 for an individual and $4,000 for families.

“Currently there is a sliding deductible,” Berner said. “The lowest tier is $400 for an individual and $800 for families. The highest tier is $1,000 for an individual and $2,000 for families.”

* Establishing a policy that prohibits working spouses whose employer offers health insurance to be enrolled in the conference’s plan.

Berner said that if one assumes that all of the plan’s active family policies include a spouse, 123 spouses are insured by the plan.

The Board of Pensions estimates that 25 percent of the spouses would be required to move out of the plan. That would save an estimated $400,000 to $500,000 a year, Berner said.

* Requiring participants to work at least 30 hours a week to be eligible to participate in the plan. The current requirement is 20 hours a week.

Reserves

Berner said that as of Dec. 31, 2017, the plan had earmarked reserves of approximately $1.1 million plus excess money in a deposit account of more than $2 million. He said $2 million was transferred from reserves in 2017 to cover the plan’s shortfall.

“The plan has never been interested in increases to build reserves — only to cover current expenses,” he said.

None of the proposed changes would become effective until Jan. 1, 2019.

Berner said the Board of Pensions is constantly reviewing the plan as well as plans in the marketplace. “We’ve tried to keep this plan sustainable,” he said.

“Nobody’s going to be happy with it,” he said of the proposed changes. “We looked at several things. One is to not impact the local church. There’s no increase in apportionments, no increase in premiums, no increase in maximum out-of-pocket. So the local church is not impacted by the recommendations we’re bringing to Annual Conference. I think that’s a key.”

Summary

The Board of Pensions’ proposals are summarized on Page 144 of the 2018 Conference Workbook.

A video about the proposals is posted on the conference’s Facebook page. Go to www.facebook.com/wvumc/ In the menu on the left side of the page, click on “Videos.” Then select the video titled, “Health Insurance presentation.”

Berner said the proposals will be discussed during the Annual Conference at the Laity Session at 10 a.m. Thursday in Wesley Chapel.

In addition, Berner said he will be available to answer questions at the conference’s Friday afternoon business session in Wesley Chapel. That’s when delegates are scheduled to vote on the proposals.

Jamie O’Brien, chair of the Board of Pensions, plans to present each proposal individually, Berner said.

Asked what would happen if one or more of the proposals fail, Berner said, “The Board of Pensions will be prepared to address the revenue side of the equation depending on what recommendations pass or fail.”

A societal problem

Rising healthcare costs are a problem throughout society. It affects small plans like the conference’s, which covers 560 individuals and families, and big plans like the West Virginia’s Public Employees Insurance Agency, also known as PEIA, which insures 116,319 employees, retirees and dependents.

In fact, an inability to resolve PEIA funding shortfalls was one of the reasons West Virginia teachers went on strike earlier this year.

One outcome of that strike occurred in February when Gov. Jim Justice created a task force to make recommendations and solutions to find a permanent fix for funding the PEIA. The task force is holding meetings around the state through mid-June as it seeks to find solutions.

Four proposed changes in the conference’s health insurance plan are designed to reduce the plan’s costs and encourage plan participants to become more involved in their health care.

The proposed changes are not popular but action is necessary, said James Berner, the conference treasurer and director of administrative services.

The health insurance plan’s 2019 anticipated annual revenue is $7.1 million:

* $3.9 million would come from apportionments. Berner, who also serves as conference benefits officer and executive secretary of the board of pensions, said this amount hasn’t changed since 2015. The Board of Pensions is recommending that the amount remain unchanged this year.

The $3.9 million represents 31 percent of the $12.4 million in apportionment dollars the conference expects to receive in 2019. It is by far the largest expense (for details, see Page 185 of the Conference Workbook).

Raising the amount would mean increasing the apportionments local churches are asked to pay. That could be especially challenging for the 628 churches in the conference with 50 or fewer members.

* $3.2 million would come from premiums paid by churches and individuals. Premiums were last altered on Jan. 1, 2011, when changes required by the Affordable Care Act, also known as Obamacare, were implemented.

Berner noted that if premiums were increased, everyone in the plan would have to pay more, whether they use the plan or not.

Rising drug prices

The rising cost of prescription drugs is one of the major challenges the plan is grappling with, Berner said. Some drug prices are sky-high. Some examples: The New York Times has reported that Keytruda, a drug that can help lung cancer patients, costs $13,500 a month and Humira, prescribed for rheumatoid arthritis, reportedly costs $4,166 a month.

Of course if you have a life-threatening medical issue and there’s a drug that could save your life, you want that drug — regardless of the cost. The way the health care system works now, you probably do not know the cost and, even if you did, you might not care so long as the cost doesn’t directly affect you.

The conference’s health insurance plan limits the out-of-pocket amount participants have to pay for drugs to $7,350 in a plan year (April 1 to March 31). This limits participants’ expense but the health insurance plan’s expense is not as limited.

An incentive

One of the Board of Pension’s proposals would altar the price participants pay for some drugs.

Participants currently pay $35 per prescription. The Board recommends participants pay $35 or 30 percent of the cost of the prescription, whichever is greater.

It means that a prescription that costs $1,000 would require a participant to pay $300 instead of $35.

The proposed change would save the plan an estimated $360,000 to $450,000 annually, Berner said.

In addition to saving the plan money, the proposed change is designed to give participants an incentive to talk to their health-care provider and search for less expensive drugs, he said.

“Thirty-five dollars is not going to stimulate this person to go to their doctor and say, ‘I need to take something else,’ Berner said.

“You are going to have to take an active part in your health care because we cannot provide what we provided in the past,” he said.

Berner said that a little over 20 percent of the conference’s health insurance plan costs were attributable to drugs in 2017.

Other proposals

The Board of Pensions also is proposing:

* Raising the deductible for participants to $2,000 for an individual and $4,000 for families.

“Currently there is a sliding deductible,” Berner said. “The lowest tier is $400 for an individual and $800 for families. The highest tier is $1,000 for an individual and $2,000 for families.”

* Establishing a policy that prohibits working spouses whose employer offers health insurance to be enrolled in the conference’s plan.

Berner said that if one assumes that all of the plan’s active family policies include a spouse, 123 spouses are insured by the plan.

The Board of Pensions estimates that 25 percent of the spouses would be required to move out of the plan. That would save an estimated $400,000 to $500,000 a year, Berner said.

* Requiring participants to work at least 30 hours a week to be eligible to participate in the plan. The current requirement is 20 hours a week.

Reserves

Berner said that as of Dec. 31, 2017, the plan had earmarked reserves of approximately $1.1 million plus excess money in a deposit account of more than $2 million. He said $2 million was transferred from reserves in 2017 to cover the plan’s shortfall.

“The plan has never been interested in increases to build reserves — only to cover current expenses,” he said.

None of the proposed changes would become effective until Jan. 1, 2019.

Berner said the Board of Pensions is constantly reviewing the plan as well as plans in the marketplace. “We’ve tried to keep this plan sustainable,” he said.

“Nobody’s going to be happy with it,” he said of the proposed changes. “We looked at several things. One is to not impact the local church. There’s no increase in apportionments, no increase in premiums, no increase in maximum out-of-pocket. So the local church is not impacted by the recommendations we’re bringing to Annual Conference. I think that’s a key.”

Summary

The Board of Pensions’ proposals are summarized on Page 144 of the 2018 Conference Workbook.

A video about the proposals is posted on the conference’s Facebook page. Go to www.facebook.com/wvumc/ In the menu on the left side of the page, click on “Videos.” Then select the video titled, “Health Insurance presentation.”

Berner said the proposals will be discussed during the Annual Conference at the Laity Session at 10 a.m. Thursday in Wesley Chapel.

In addition, Berner said he will be available to answer questions at the conference’s Friday afternoon business session in Wesley Chapel. That’s when delegates are scheduled to vote on the proposals.

Jamie O’Brien, chair of the Board of Pensions, plans to present each proposal individually, Berner said.

Asked what would happen if one or more of the proposals fail, Berner said, “The Board of Pensions will be prepared to address the revenue side of the equation depending on what recommendations pass or fail.”

A societal problem

Rising healthcare costs are a problem throughout society. It affects small plans like the conference’s, which covers 560 individuals and families, and big plans like the West Virginia’s Public Employees Insurance Agency, also known as PEIA, which insures 116,319 employees, retirees and dependents.

In fact, an inability to resolve PEIA funding shortfalls was one of the reasons West Virginia teachers went on strike earlier this year.

One outcome of that strike occurred in February when Gov. Jim Justice created a task force to make recommendations and solutions to find a permanent fix for funding the PEIA. The task force is holding meetings around the state through mid-June as it seeks to find solutions.

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