DALLAS (BP)–Comprehensive medical plan rates in the Personal Security Program (PSP), offered by the Annuity Board of the Southern Baptist Convention, will enter 1998 without a rate increase. There has been only one rate increase for the plan since 1992.
Actuaries and consultants concluded the plan could go forward at its present rates, Virgil V. Ayres, chairman of the trustee insurance committee, said during the board’s Nov. 3-4 trustee meeting in Dallas. The announcement comes at a time when numerous reports in the media are projecting a new rise in medical costs.
James T. Herod, Annuity Board executive officer for marketing, legal and actuarial services, said, “While claims costs have gradually climbed and premium income has slightly declined, resources are such that consultants affirmed the ability to avoid an increase Jan. 1. I would like to think we can make it through the year without an increase in July, but we’ll have to see the experience during the winter and early spring before we decide.”
Ayres, a Pineville, La., insurance agency owner, said, “We hope an increasing number of churches will budget health coverage just like they do property insurance for the church. It isn’t fair to make pastors and staff pay for their coverage from a salary package. Medical coverage for the ministers ought to be seen as a cost of being a church.”
Although there will be no general rate increase, people who move, add a dependent or cross an age bracket may experience a monthly rate increase. The Personal Security Program is an individually underwritten, age-rated and geographically specific plan that seeks to be price- competitive with plans of similar benefits. Managed care plans may vary in rate structures.
Herod said there will be some changes in the benefit structure as a result of the Health Insurance Portability and Accountability Act (HIPAA), and these will be addressed in communications to participants. One thing that won’t change, he said, is the practice of underwriting (giving evidence of good health) for entrance into the PSP plans. A federal law passed in 1997 exempts certain church medical plans, including the Personal Security Program, from the HIPAA requirement that applicants be accepted for coverage regardless of their health condition.
“The U.S. Congress and the president agreed with industry analysts that to require plans like ours to abandon underwriting would threaten the financial stability of the plans,” Herod said.
Employers with more than 10 employees will have to meet the HIPAA provision.
There will be an increase in the rate for the PSP Medical Plan for people with Medicare from $59.19 to $75 per month. Ayres noted the plan, which is about one-half the cost of comparable benefits in other available plans, has been running an operational deficit and had to be increased.
Life rates, accidental death and dismemberment, and long-term disability rates will not change for 1998.