Obamacare and the LCMS

The LCMS issued a useless statement on Obamacare today, noting that it lacks protection for the unborn (Friday might have been a good day to say something about that.  I hate it when the Romanists beat us on the issue.  Not that they shoudn’t talk, but we should be talking more) and that it may require some, as of yet, undetermined changes to Concordia Plans.  In case you are wondering, here’s a first glance, based on news reports.  (Subject to change, or to be wrong.  After all, it’s 2700 pages.  I’m pretty sure even the news outlets don’t fully know what’s there yet.  Goodness knows Congress and the President don’t).

1) The lifetime limit of 5 Million dollars is no longer there.  Theoretically good because that limit isn’t there.  Practically, probably meaningless, because it has never been reached.  But ultimately, this is a self-funded plan.  That means that, if it happens, the plan must now pay for it.  Which means you must now pay for it.  Can the plan afford it if, for example, a person suddenly racked up 10 million in fees for a hospitalization?  (Not impossible.  Readers Digest told the story of a man who ran up a $4 million bill in a couple of weeks in a failed effort to save him from some sort of exotic illness)  So what will Concordia Plans do?  The plan has to be ready for contingencies like that.  The actuaries will run the numbers.  If the risk is great enough, they will likely purchase a catastrophic coverage rider that limits their liability to only a couple of million.  If not, they will likely just increase the overall “money in the pot” to cover such an eventuality, should it occur.  Of course, in either case, the congregation pays for this.  This will raise costs.  Perhaps not significantly.  But they will go up.

2) It is possible that the “high deductible” plans will have to lower the deductible from $2500/$5000 to $2000/$4000.  This means the plans will cost more.  After all, they start paying sooner.  When the actuaries run the numbers, they will have to decide how much more to charge, or if it is still worth it to have high deductible plans.

3) The High deductible plans are all the rage these days.  But the limits on the spending account contributions are being lowered to $2500.   Per person or per family?  Don’t know.  But it makes the High deductible plans less attractive.

4) Rate hikes will be reviewed by the government, and possibly vetoed.  Fortunately, our plan is usually lower than the national average, so shouldn’t have trouble in this regard, but being self funded, they can’t offered to be told, “you can’t raise rates”.

My analysis is based on this article.

The real wild card in all of this are the “health insurance exchanges” that will be available for low-income families.  (Defined as 133 to 400 % of poverty level.)  These would be subsidized by the fed, and would cap the premiums at 3.3% to 9.5% of income.  For perspective, the C-Plan costs almost half of what my congregation gives me.  In other words, if it were capped at 9.5% of my income, I would get a raise of about 20%, and still be below the limit.
What will this mean for C-Plans?  I don’t know.  But the altruism of “joining with synod to help each other out” will be pretty hard to defend when it costs a pastor/congregation 15-20K/yr per worker.  Such a thing might mean the end of the C-Plan for health insurance, leaving only the retirement/life/disability.  I think that is the most likely scenario, long term.  But that’s just my opinion.  (A pretty good guess though, since the law is designed to put insurance companies out of business.)

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