ELCA and Portico Announce Changes to ELCA Medicare-Primary Health Benefits for 2019

In response to the ever-changing health care landscape, the ELCA and Portico have worked together to design changes to ELCA Medicare-Primary health benefits that will take effect Jan. 1, 2019. The majority of members with these benefits will be positively affected by enhanced coverage and reduced monthly contributions, or premiums.

Continuing a Tradition of Care
Since its formation, the ELCA has been committed to caring for the well-being of churchworkers. Portico has overseen the ELCA's health, retirement, and other benefits since 1988, when the ministries of the Lutheran Church in America, the American Lutheran Church, and the Association of Evangelical Lutheran Churches merged to form the ELCA.

At that time, the ELCA agreed to subsidize health coverage for eligible retirees and family members who participated in a predecessor church plan. The subsidies vary in amount based on several factors, including age and years of sponsored service. Currently, the ELCA subsidizes ELCA Medicare-Primary health benefits for four out of five retirees and spouses. The subsidies range from fewer than $5 to several hundred dollars per month.

Along with the subsidies, the ELCA inherited a funding shortfall. The church has sought to close the gap through funding from the churchwide budget and by collecting a "retiree support" contribution from congregations. However, health care costs have outpaced what anyone imagined in 1988, and life expectancies have continued to grow. As a result, retirees' medical costs have increased significantly and, under the current approach, the ELCA estimates a continued shortfall.

In 2016, the ELCA Church Council formed an ad hoc working group to recommend a plan to sustain this important care. In a video message to members, Presiding Bishop Elizabeth Eaton shared: "In response to Church Council decisions, we have worked with Portico to make changes that will reduce costs for you and our church and allow us to continue the care and networks of health care providers you count on for years to come. I am very pleased with the outcome, and I believe you will be too."

Enhanced Coverage, Lower Costs Expected
Effective Jan. 1, 2019, Portico has selected Humana to insure its hospital and medical benefits as a group Medicare Advantage plan. These new benefits will replace the Medicare supplement currently administered by Mercer.

The change will affect the nearly 12,000 ELCA Medicare-Primary members, including retirees, spouses, dependents, members receiving disability benefits, and churchworkers who continue active service beyond age 65. Covering more than 8.5 million Medicare enrollees, Humana's economies of scale will help reduce the monthly amount that most ELCA Medicare-Primary plan members contribute, while preserving today's robust coverage.

In addition, Humana will offer new wellness programs that have been requested by members, said Portico president and CEO, the Rev. Jeff Thiemann. "We are excited about the enhanced care and cost savings this change will bring for members."

In 2019, members with ELCA Medicare-Primary health benefits will also have prescription drug coverage administered by Express Scripts and dental coverage administered by Delta Dental, the same companies serving members today.

With this change, the ELCA Medicare-Primary health benefits will no longer cover Medicare-eligible members living outside the United States and its territories. Less than 0.1% of Portico's current membership has this coverage.

Subsidy Change Designed to Strengthen Long-Term Viability
Also changing Jan. 1, 2019, the ELCA Church Council has determined that subsidies will become a fixed dollar amount instead of a percentage off the monthly health contribution. The amount is expected to increase 3% per year beginning in 2020, as approved by the council.

For most eligible members, the 2019 subsidy will start at the same dollar amount as today, with some exceptions for members whose subsidies are subject to different terms. For example, a monthly subsidy of $100 in 2018 will start at $100 in 2019 and grow by 3% to $103 in 2020.

Because Portico expects members' monthly health contributions to decrease next year, the subsidy will actually fund a greater portion of the monthly contribution amount. As a result, most retirees can look forward to paying a lower monthly contribution in January.

In fact, some older retirees currently receive such a large subsidy percentage that their 2019 subsidy dollar amount will exceed their 2019 monthly contribution. The excess will be applied toward those individuals' future monthly ELCA health contributions.

It's difficult to accurately predict future health care costs, but if health care costs increase at a greater rate than the subsidy does, the portion of contribution paid by the member may increase over time.

Portico to Share Details, Help Ensure a Smooth Transition
Members directly affected by these changes are being contacted in July and will receive personalized details, including 2019 subsidy and contribution amounts, starting in late September. Likewise, in July Portico is sharing advance notice of these changes with members currently age 64 who will be eligible for Medicare in January.

To help ease the change to Humana for retired members, Portico will automatically enroll them in the 2019 option that's most similar to what they have today. Just as in recent years, retired members who prefer a different ELCA Medicare-Primary option ― Economy, Standard, or Premium ― can elect it this fall during Portico's Annual Enrollment.

Members with ELCA Medicare-Primary benefits who are sponsored, on leave from call, or disabled will also transition to the new Medicare Advantage benefits. Like today, these members will keep the Standard health benefit option in 2019. They will have a choice of options when they retire and receive subsidy details if they qualify.

In a joint letter to members, Eaton and Thiemann described these changes as a way to better withstand the decades-long dramatic increase in U.S. health care costs. "More importantly," they said, "this new approach means the church can carry on our time-honored tradition of supporting the well-being of faithful servants."

https://vimeo.com/278174473/171f913a8a