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November 24, 2014 - Kim Moore [see other posts]

Health Insurance

It was a short conversation

The young clergyman thanked me for the Fund's role in bringing information about insurance availability on the health insurance exchange to his community. I remembered that he had asked a lot of questions of the speaker at that session. I had presumed he was a critic of the Affordable Care Act looking for the problems. But that was not the case this time.

He explained that in his denomination (not United Methodist), local churches are not required to purchase health insurance for their pastors. For years, he, his wife and two children had not been able to secure affordable health insurance. They had worried that a medical issue -- a normal childhood accident, for example -- would cause them enormous financial problems. After hearing more about the health insurance exchange, he went online and was able to secure coverage for his family at an affordable price due to the group rating of products there and the subsidies. A load had been lifted from their lives.

He can't tell this story to his congregation because they are firmly against ObamaCare. I have tried to be careful in the telling so that somehow this example of appreciation for the ACA does not get back to them.

Nothing about this story, or its likely duplication into hundreds of thousands of American homes, will change the minds of people who oppose ObamaCare. To them, it appears that we are redistributing tax dollars through subsidies to people who can't afford coverage. It also points to millions of hard-working Americans who have been and continue to be living in the financial limbo of inadequate financial resources to pay for medical care they may need at any time. Of course, thousands experience the impossibility of payment and go into bankruptcy due to medical needs. Others slide by and delay preventive care, dental care, and medications needed for chronic illnesses.

Faced with a 30-percent plus increase in premiums for 2015, the Great Plains Conference of the United Methodist Church (Kansas and Nebraska) decided last month to terminate its group clergy health plan and give each clergy person $14,000 to go onto the health insurance exchange and purchase what they can. This contribution will be reduced by income taxes and self-employment taxes before being available to pay for insurance. Clergy will find lower group rates than they have experienced in the UMC Conference plan -- where the average age is mid-50s. Likewise, the costs of a small group of high users will not be integrated directly into their premiums but instead spread over a larger group of buyers. It is very likely that the flat amount of $14,000 will create a windfall for single clergy. Increased retirement contributions have to be paid on the taxable $14,000, so all clergy will get an increased retirement benefit. Although very little of the premium increase was due to the ACA (mostly due to higher than planned utilization) this is another example of the ACA at work and could be considered an example of how it creates incentives for some employers to drop their health plans. Now, clergy in my denomination will join the newly-insured clergy of other denominations which don't have clergy health plans, but our clergy are getting substantial help with the annual $14,000 payment. It will be interesting to see how this experiment goes for our Conference, with lots of uncertainties ahead (U.S. Supreme Court decision on health insurance exchange subsidies being the main one).

Health care costs are out of control. Health insurance premiums are too high (although growing less rapidly overall than prior to the ACA). See Kansas Health Institute report online or download the brief. The need for a financial source of payment for medical care gets ever more complicated. There are fewer and fewer short conversations on the subject.