Thursday, June 21st, 2012
Summary: Village Missions has chosen to suspend its self-funded health plan and purchase a fully-insured group plan from Regence BlueCross.
History of Self-Funded Plan Nearly two decades ago, because of rising health insurance costs, Village Missions decided to develop a self-funded health plan. This plan succeeded in providing adequate coverage for our missionaries serving in a number of diverse and sometimes remote locations. In spite of rising health care costs averaging 15% a year, we were able to limit increases and keep costs to the churches under control. From 2009 – 2011 we were able to hold our premium at the same level and still end each fiscal year with a balanced budget.
Included within our plan were not only health coverage but also disability insurance and a life insurance policy. In addition, we employed the services of a case management company, Medical Rehabilitation Consultants, that did a wonderful job in assuring that our missionaries with serious health issues received the best care.
Explanation of Rising Costs In an effort to contain cost over the years, we have allowed our stop-loss claims level to rise. This is the amount at which Village Missions can recover claims cost from a reinsurance policy. In the early years, this amount was set as low as $60,000 per individual. In order to save premium dollars, it has risen to the current level of $160,000 per individual. This stop-loss level is sufficient if the plan has only two or three large claims per year. This year we have had an exceptional number of large claims. In addition, we have had a number of large claims that do not approach the stop–loss level, yet still have had a costly impact. Six cases accounted for 45% of our medical bills. Nineteen claims amounted to $907,899 or 83% of our medical bills. In spite of a premium increase of $75 starting last January, our plan was in a $724,547 deficit at the end of May. General Fund reserves were used to cover these overages. Our self-funded plan became unsustainable.
Exploration of Options I instructed our C.F.O., Jim Cross, to begin to explore other options. A possibility was one of the Christian medical sharing ministries. We investigated the three major groups but only one, Christian Healthcare Ministries, was willing to cover pre-existing conditions. Yet even with the large hurdle of pre-existing conditions overcome, this option would represent a significant change in how missionaries access health care.
Missionaries would be considered “self-pay” patients, needing to negotiate up-front with providers, pay for services out-of-pocket, and wait for reimbursement. There would be no wellness care, no coverage for doctor’s visits or lab work, and no prescription coverage. Even though the financial structure of this option would include the use of health savings accounts, there is a real concern that missionaries would delay care, not see the doctor when needed and not fill prescriptions, thus causing more serious health problems and greater expense later on.
We could have possibly overcome these obstacles but, ultimately, it would represent a significant transfer of cost and work to Village Missionaries. We want missionaries to be able to access health care easily when they need it, without concern about cost, or trying to manage a deluge of bills when they are sick. We want them to be focused on “Preaching the Word and loving the people.”
The second option, chosen unanimously by the Benefit Board, was to purchase a group plan from Regence BlueCross. Their bid, although higher than our current premium, was much lower than the premium we would have to charge churches to balance our plan. The cost will be $430 for a single (some spouses are on Medicare) and $1220 for a couple or family. The coverage will be virtually unchanged from what we have now and the change should be quite easy. We have an effective start date of August 1. Regence BlueCross has guaranteed this premium for 17 months.
Recognition of Hardship We recognize that this change will present financial hardship to both the churches we serve and to Village Missions. For Village Missions we estimate that it will require an additional $18,000 a month as we cover the additional costs for our poorer churches and administrative staff. In addition, it will slow the progress a church makes toward becoming self-supporting, because so much is required to provide health coverage. It is disturbing that health care has become such a large part of our budget and the budget of churches we serve. Of course, we are not alone in experiencing this problem.
Village Missions will also face a few difficult months, as claims that have already been incurred under our self-funded plan will need to be covered. We estimate that $500,000 in bills or more will be out there when the plan ends on July 31. As we have with the deficit, we will use our reserves to cover these expenses.
Objections Some have asked, “Why not just pray for healing?” We have prayed for healing and continue to trust God that He will heal. We are optimistic for many of our seriously ill Village Missionaries. However, we also believe that God uses the health care we have in this country and that He would have us pay our bills.
Some have advocated letting our missionaries be on their own in finding and paying for their health insurance. One mission leader told me that he was glad that his mission had made the decision years ago to “get out of providing health insurance.” Yet I believe that God has used Village Missions precisely because we do care for and support our missionaries. The salary support and health coverage we provide has enabled our missionaries to go throughout this country to rural communities and dedicate themselves to reaching people for Christ. We couldn’t do this without the support of our larger churches (once not self-supporting) as well as the many people who sacrificially give to support the work of reaching rural America for Christ. God has used this approach to win untold numbers of people to Christ, send out a huge number of Christian workers and pastors, and strengthen the thousand or more churches served by Village Missions since 1948.
Conclusion I believe that God has opened this door to enable Village Missions to continue developing spiritually vital churches in rural North America.