ARTICLES

"You're Cooked"

How One Diocese Cleaned up Health Insurance

By Monsignor Robert F. Vasa

Editor: Monsignor Vasa was selected as bishop of Baker, Oregon in November, 1999.

I was appointed to the office of vicar general for the diocese of Lincoln in June of 1996. One of the duties of the vicar general in the diocese of Lincoln, Nebraska, is that of finance officer which is linked with priest benefits and thus health insurance. Throughout 1996 I monitored the health insurance plan and became concerned about my inability to comprehend the whole health insurance procedure for our diocese and my inability to nail down the extent of coverages. As I now understand it, we had a minimum premium, self-funded plan, or perhaps more accurately a partially funded plan. The parishes paid premiums which the diocese distributed to the administrator who in turn negotiated contracts, sought discounts, set rates and paid claims as appropriate according to plan design. The plan included a stop loss limit for individuals as well as for the group (hence the partially funded element as I understand it). This worked well but our group was too small, our demographics too unfavorable and our rates too high. Besides the priests serving in our diocese, our insurance covered two or three employees of the diocese proper. It did not allow for the coverage of parish employees. I discovered that our per-person administrative fees were relatively high and this led, in part, to high premiums for our priests.

That was my initial concern. I then reviewed our diocesan plan more thoroughly and realized that our insurance would have paid for abortion, should someone have chosen that option. There were no moral safeguards or prohibitions; tubal ligations, vasectomies and the like were in fact "covered services." I was shocked. Apparently the broker had never broached this issue and even though the possibility of someone in our group choosing such procedures was extremely remote (since there were only one or two families) the reality nonetheless existed; our plan did not exclude abortion coverage. We were placed in the position of being adamantly pro-life and opposed to all abortion at all times but our health insurance would pay for one should a group member make that unfortunate and destructive choice. Perhaps anger can sometimes be a good thing; at that point I was livid!

As I looked at and studied the various health insurance policies offered by our Catholic schools to their employees I discovered that most of them had no reference to or thought of limiting certain coverages because of the immoral nature of the services offered. The one exception was abortion. There was and is a good bit of vigilance on the part of school administrators with regard to this issue. Even that, however, is not always entirely what it appears. One plan boasted that it excluded "voluntary abortion." I called the insurance offices and inquired what "voluntary abortion" meant. The definition of "voluntary" was that it was not medically necessary. I further inquired whether the plan would cover an abortion when there was a referral by a doctor who felt that for the mental or emotional well being of the mother an abortion was "necessary." The answer: Certainly under those circumstances the abortion would be a covered procedure. While the insurance excluded "voluntary abortion", the medical reality was that almost every abortion would be defined as "medically necessary."

In the spring of 1997 I began to investigate the possibility of formulating a diocesan plan which was morally appropriate for a Catholic entity and which could provide coverage for priests, religious, seminarians and parish and school lay employees. Once I began to gather information from the schools I was barraged by insurance brokers who wanted to quote insurance packages for the diocese. In every case the brokers presented plans which were "pre-packaged." Every one presented a range of deductibles, a range of out-of-pocket costs and a range of percentages of coverage, but when I inquired about excluding coverage for morally objectionable procedures or prescriptions I received no satisfactory answers and absolutely no assistance. Some were willing to exclude anything we wanted with no change in premium rate. Some were absolutely unwilling to do the work to help write and set up a plan customized to our specifications. Some clearly saw no reason why I was concerned about the issue at all. I realized that under each of these proposals we were still paying for morally objectionable procedures such as sterilization surgeries, tubal ligations and vasectomies; we were simply not making these things available for the people in "our group." This made no sense to me.

The other difficulty which I ran into was that no one wanted the priests' policy joined to the teacher/employee policy. Each proposal gave appealing rates for the portion of the plan covering teachers but when the priests were added the numbers shifted upward, sometimes dramatically. The priest portion of the group was an older population and there was a fear that the claims experience of the past would drive the total cost upward. Thus I was accused of driving up the costs for the lay employees as well as for the whole diocese by my insistence that the priests be covered on the same plan. I do not understand why such animosity was directed at me other than the desire of the various brokers to compete with existing school insurance packages. It appears they believed they could not compete as long as the priests were included. The dimension which was missed by the brokers was the fact that the diocese of Lincoln is one entity. The same parishes which were paying the high premiums for our priests were the ones paying at least a portion of the premium for the teachers. The total effect to a parish was the same whether the priests were treated separately or incorporated into the lay group. In fact, by linking them there was a total saving for the diocese and thus for the individual parishes.

I have never made any claim to understand very much about the insurance industry but when I met with Michael O'Dea of ValuSure and with Tracy Williams of Benefit Systems, there was a clarity and a simplicity which, to be perfectly honest, seemed too good to be true. Due to my past encounters with other agencies I was quite skeptical and untrusting. I am not (I hope) a fool. A brief and repeated (due to my skepticism) explanation of how ValuSure and Benefit Systems could assist me in writing a customized and very specific plan which delivered what I envisioned for diocesan health insurance was quite refreshing. Furthermore, there was an insistence that they could do this very efficiently. The administrative fees are now a fraction of our previous per person per month expense. I estimate that we are saving nearly $30,420 in administrative fees for the priests alone. I found that some school policies also had high administrative fees due to the small sizes of their groups. While these fees were not seen to be unreasonable, the multiplication of these fees throughout the diocese resulted in a fairly significant number. By consolidating this expense we have reduced the overall premium cost for priests in the diocese by more than $100,000. It is hoped that as more schools elect the diocesan plan the savings to the parishes and to the diocese will also increase. I am still "selling" the plan to some of our schools and parishes.

While it would be wonderful to have 100% participation, and I suspect we will move to this in the near future, the fact was that I wanted to crawl before I walked and walk before I ran. Several schools have come on to the diocesan insurance after its first year in operation mainly due to significant increases (20 to 35%) in the premium for their former health insurance policy. Since each parish and institution is granted a degree of autonomy I felt it was important to bring them along "voluntarily." One of the difficulties I encountered was that some school insurance policies had no deductible or very low out of pocket expense which was a great advantage for the employee but not so good for the school (parishioners) who paid a large portion of the premium. Unfortunately it was often found that the employees were determining which plan and which benefits and the institution was footing a significant portion of the bill. In our small school systems it is difficult for an administrator to "mandate" a new and untested plan with predetermined benefits when those benefits are significantly different than the benefits presently enjoyed. So, I have traveled to schools and parishes to "sell" the idea of a diocesan insurance plan and have been moderately successful. For a number of teachers and employees the moral dimensions are very clear and they are willing to make sacrifices for the sake of the greater good. Others, unfortunately, do not manifest a recognition of the moral implications or any desire to research them further.

In some regard this has been discouraging because very often the primary concern of the people to whom we offer diocesan insurance is how the plan impacts on each individual or family without regard for how it impacts on the parish as a whole or on the whole Culture of Death or Culture of Life. This tells me that we still have a lot of evangelizing to do among our Catholic people. I have tried to make it clear that we never intended to cover every possible illness or expense but rather, at least initially, to provide very good health care coverage, which would avoid catastrophic expenses, at a very reasonable cost.

For more than a year I had met with brokers and reviewed various insurance coverages and every broker kept coming back with the same old thing with a different wrapper. What surprised me most was the kind of animosity that my questions engendered. I really began to think that I was simply being too unreasonable and that it was simply necessary for the diocese to accept the moral shortcomings of plans presented in order to obtain a cost-effective, benefit-rich insurance package for our employees.

After several months of working with Michael O'Dea and Tracy Williams, initial drafts of a plan were received, studied, amended and studied and amended again. I noticed in the plan, for instance, that it included (as is standard in some industry plans) an exclusion of pregnancy benefits for a dependent. This was not consistent with our pro-life and pro-family effort and so it was changed. I saw that certain types of counseling were excluded including family counseling. Since our plan is pro-family, I could not see keeping such an exclusion. There is now a benefit which covers some of the cost of marital therapy and family therapy. I inquired of Tracy whether we should include sterilization reversal operations as a covered procedure. My thinking was that if someone had been sterilized some time ago and now realized the error and wanted to make themselves morally and physically whole again we had the capability to assist them. The reversal surgeries are covered in our plan at the same rate as any other necessary surgery.

We studied at length, and continue to study, transplant procedures. Most transplant procedures are covered but those which involve a non-paired, vital organ have a special provision. Such procedures are excluded unless the donated organs are removed from a donor who is determined to be dead by virtue of a total collapse of the cardio-vascular and respiratory systems. The language in the plan was very specific and was drafted in consultation with Dr. Paul Byrne and Mr. Michael O'Dea. This seemed to be the only way to insure, with certainty, that we were not participating in procedures which view living patients more as donors than as persons with a right to life and a right to keep the organs which were keeping them alive, however marginal that life may be. Our plan also declines coverage for individuals who choose to be donors of a non-paired, vital organ.

I realized, in discussions with Dr. Paul Hayes, a local NFP only obstetrician/gynecologist, that there were a number of OB procedures with which we should not be affiliated. A partial list was drawn and another list was received from Tracy Williams and determination made, in consultation with Dr. Hayes, of those procedures which should and should not be covered. Specific instructions have been given to our administrator, Benefit Systems (Tracy Williams) concerning these objectionable procedures. It was at this point in the process that I realized I could not have done any of this without the determined cooperation and active participation of Tracy Williams. He showed me the extent to which a plan can specify inclusions and exclusions and encouraged me to make as specific a determination of these matters as possible. He showed me that we did not have to compromise in order to have a good and efficient plan. The listing of procedures is available and there are many which we, as Catholics and as followers of Christ, simply cannot condone and for which we should not pay. To a certain extent our silence "seems" to give consent. Very often we speak loudly about the inappropriateness of these medical actions but we then turn around and pay for them with the insurance which we provide for our employees. The general public then cannot be expected to hear our words because our actions speak so much louder. Our actions need to be as consistent as possible with our words.

We reviewed various prescription lists and tried to determine which prescriptions were purely contraceptive or abortifacient and excluded coverage for any of these. Some might argue that there are non-contraceptive uses for some of these medications but there is solid medical information to indicate that there are almost always other, morally legitimate prescriptions, which may be physically better for the patient and which directly treat the underlying cause of problems rather than merely masking the symptoms. Our diocese promotes the proper understanding and use, if applicable, of a method of family planning known as Natural Family Planning (NFP). We have written into our plan a coverage for a set amount to go toward the cost of learning the method and of the follow-up sessions. The amount allocated will cover practically all of the costs incurred by a couple learning a method of Natural Family Planning. Our plan looks to be pro-life and pro-family.

When I notified our priests of our new insurance policy I wrote: "I am very hopeful that you will be very pleased with this new plan. This plan provides us with excellent health care coverage and greater flexibility than we had in the past; it is a truly pro-life plan; it does not cover contraceptives and immoral procedures; it has built in pro-family elements (pregnancy of a dependent, some NFP reimbursement); it is cautious about some transplant procedures; and it is cost effective. If we can enlist more schools and broaden the group we should see significant savings over the coming years. Again I thank you for your cooperation and pray that you find this plan satisfactory in all ways." I have found the priests, who can sometimes be my worst or best critics, to be very supportive of this plan and I believe they are quite pleased with it after eighteen months of experience.

Recently we encountered a sad situation of a suicide by one of the students in one of our schools. Even though this person was not the dependent of an employee, the question was raised as to whether the plan covered injuries resulting from an attempted suicide. We had excluded such coverage but upon further reflection and discussion determined that a dependent or even an employee could make such an irrational and unfortunate choice and that it was not appropriate for the Church to withhold financial assistance in the form of health coverage at such a desperate time. The plan was quickly amended to include coverage of self-inflicted injuries.

The plan is not perfect, it has flaws but it also has many right things about it. I still have my moments of doubt and moments of fear when I ask myself, whether I really have any idea what I have done here. I try to set aside the fears and doubts and I simply decide to trust what I believe to be right and good. I feel better about the moral dimensions of our plan than about any other alternative. I question whether we should have provided more benefits, lower deductibles, lower out of pocket expenses but I realize that these can be amended as we gain a bit of plan experience. Somehow I feel like I can better claim to be a man of integrity because I have worked to translate my belief about right and good into definitive action.

When I met with the representatives of our former insurance policy I told them that I was pro-life, that the Catholic Church was pro-life, that I did not believe in paying for abortions and that I was going to try very hard not to do business with those who do. Since initiating this plan I have had contact from several Insurers assuring me that they can administer our plan very effectively, guarantee a broader network of coverage and adhere to our exclusions and additions. I have told them that I am very pleased with the present arrangement and I further asked them where they were when I was struggling to get the plan we presently have in place.

As a result of this process and the subsequent contacts I have had with insurance companies, I realize anew that for some this is just a business and the business of business is money. Even though our group is relatively small, it has created a bit of a stir in Nebraska. I have had calls from major insurance executives, hospital administrators and brokers who all have a better idea for me and want a piece of this small pie. My skepticism about their genuine concern for the well-being of this group continues to exist. I have learned to look at the life issues first. If someone approaching me has business as the first order and not life, as is usually the case, then I most probably am not going to be too interested. I am not unaware of the economic dimensions but for me it is not purely economic, it is about doing the right thing because of a moral conviction that good must be done and evil must be avoided.

In a letter from a broker, I was "informed" that if we go on our own we could lose the possibility of being able to purchase a Medicare supplement policy for our priests when they retire. He wrote: "Guess what! They can't qualify for it because the insurance company requires medical underwriting and many can't pass. Your [sic] cooked." He further wrote: "I guess you believe in the old adage 'you are an expert only if you live 50 miles away.'" I could not believe that I was being attacked for seeking a better, morally responsible plan. The "arguments" posed by the broker were confusing for me. I did not know if his statements about our elderly priests were accurate or merely an angry outburst. Since I had chosen an out-of-state administrator the broker continued: "What does out-of-state business want other than our money. They have no heart. Now I know what the real issue is. To say that I am bitter is a relief."

I was surprised to learn that the perception of the large insurance companies in Nebraska is that they "have a heart." Do they have a "heart" for Life, do they have a "heart" for the Catholic Church, do they have a "heart" for Christ, do they have a "heart" for our sick and retired priests? The depth of their concern for the diocese and its employees seriously to the fore only when we announced that we were considering going elsewhere.

I applaud the many "socially responsible" investment portfolios presently available which allow Christians and Catholics to invest without supporting those agencies or endeavors which they do not support or condone. I have tried to do something comparable in my small corner of the Insurance world but I do recognize my limitations. Do some of the doctors in the network act contrary to Catholic principles? Yes. Does the network itself contract with doctors for morally objectionable procedures? I suspect it does. Does our plan have some gaps which perhaps allows some payment for some objectionable procedures or prescriptions? I suspect it may, but I am not aware of them, yet. I do know that I now have a diocesan health insurance plan which allows me to monitor potential moral abuses and I have a plan which can be readily amended to more closely conform to Catholic and Christian moral principles should the need arise.

I cannot control the world but I must control those elements which are within the scope of my ability. I will not accept the argument that we contract with pro-contraception doctors therefore our plan is really no different than the "boiler plate" plan. The difference is that I cannot control what the doctor does or who the people in the plan go to but I can control what we pay for and therefore what we implicitly condone or support. I can also do my best to associate and affiliate myself with agencies which stand on the same moral ground as I, such as ValuSure and Benefit Systems. Are they perfect? No, I am certain they are not and they make no claim to be, but then neither am I. I do however find the people who represent these agencies to be conscientious about life and life issues. I find them extremely attentive to my concerns about pro-life and pro-family endeavors and I truly feel, in working with them, that we are operating on the same moral page. That is very reassuring and gives me a confidence that we can and will continue to work together in the future to assure that the diocese of Lincoln, the Catholic Church south of the Platte River in Nebraska, while living in the midst of the world, does not needlessly take up the ways of the world or involve itself in inadvertently supporting the very moral evils we are dedicated to opposing.

It has not really been a difficult road. It has been at times confusing, at times frustrating, at times a bit fearful but my confusion, frustration and fear were diminished by a confidence in Michael O'Dea and in Tracy Williams and ultimately by a great confidence in God. The impact of these elements was also diminished by a conviction, partially driven by anger, that I was not going to allow myself to be beleaguered or badgered into signing on to a plan for another year which did not comply to the fullest extent possible with Catholic moral principles.

I believe it is possible for the Catholic Church to do much more in the area of health insurance. I believe we can and perhaps must begin to look at making only faith based health insurance available to employees of Catholic institutions and making faith based insurance available to our dedicated Catholic laity who are literally forced to participate in plans which provide coverages for procedures which they should and very often do morally oppose.

When I started asking questions about health insurance three years ago I had no thought that this was new, innovative, unreasonable or impractical, I saw it as something necessary and important. I did not accurately "document" the project, I more or less lived through it and only in retrospect see it as something unique and even quite extraordinary. No one is more surprised than I to find that this plan has generated questions and interest all across the country. The bottom line which really must drive this whole field is that we can and we need to do something courageous for our Catholic people in the area of genuinely Catholic health care insurance. Any other kind of "compromise" is nothing more than hand wringing about how terrible it is that sterilization, contraception, abortion and the like are the rule of our land all the while supporting the agencies which provide these services and providing and paying for the insurance to pay for them. We can and we must do something much better for our Catholic people and we can and must do something much better to uphold our Catholic principles.

To contact ValuSure, call 248-594-8664, or Benefit Systems, 317-573-2004.

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