Lawmakers Question Duplicative Retiree Drug Coverage

More than 200,000 federal retirees are enrolled in two government-sponsored prescription drug programs, and the duplicative coverage may cost more than $200 million annually, according to two House members.

The federal retirees are probably paying $60 million in unnecessary premiums, and taxpayers are providing $140 million in subsidies, Reps. Henry A. Waxman (D-Calif.) and Danny K. Davis (D-Ill.) wrote in a letter to Bush administration officials.

The prescription drug benefits are provided to federal retirees through the Federal Employees Health Benefits Program, or FEHBP, and Medicare Part D. Congress directed Medicare to coordinate benefits with other prescription drug plans, but Medicare and FEHBP "have not acted to require or ensure effective coordination of the drug benefits," Waxman and Davis wrote.

As a result, private insurance companies offering Medicare Part D coverage "appear to be reaping a $200 million windfall annually, paid for by the retirees and American taxpayers," they wrote.

Waxman chairs the House Oversight and Government Reform Committee, and Davis is chairman of the House federal workforce subcommittee. Both have jurisdiction over federal retirement benefits, including health-care coverage provided to civil service and postal retirees.

Their letter, dated May 12, went to Linda M. Springer, director of the Office of Personnel Management, and Kerry N. Weems, the acting administrator for the Centers for Medicare and Medicaid Services.

A spokeswoman for the OPM said the agency would not comment because a response was being prepared. CMS also is developing a response, a spokesman said.

In the letter, Waxman and Davis said briefings provided by the two agencies raised questions about whether taxpayer money was being wasted. Officials at the agencies, in discussions with the House committee, said there was almost no coordination between the two programs, the letter said.

For most federal retirees who are 65 and older, Medicare serves as the first payer on insurance claims. When Medicare added a prescription drug benefit in 2003, OPM officials said federal retirees didn't need to enroll in Part D and pay extra for prescription drug coverage because FEHBP benefits were better or equivalent to the coverage provided by Part D.

The OPM also said FEHBP and Medicare would coordinate drug benefits, but Waxman and Davis wrote, "this does not appear to be happening."

Intern Program Proves Popular

The Federal Career Intern Program has become one of the most popular hiring programs in the government, data in a new Office of Personnel Management report show.

From fiscal 2004 through 2007, the intern program brought in 45,975 people to the government. The new hires usually work as interns for two years, and those who successfully complete their training program are converted to full-time, permanent civil service employees.

In 2004, the OPM said 6,783 interns were hired by agencies. That number jumped to 16,755 in 2007.

Most managers and personnel officials told the OPM that they used the intern program for entry-level jobs and found it an efficient way to make job offers. The regular federal hiring practices are often faulted for being too cumbersome and for taking too long, discouraging many job applicants.

But the intern program has drawn criticism from the National Treasury Employees Union, which filed a lawsuit last year alleging that the program undermines the government's commitment to fair and open competition for federal jobs.

The new data confirm that the intern program is being used to get around rules that require merit-based hiring, the union contended yesterday.

The union, which represents employees at Customs and Border Protection, the IRS and the Federal Deposit Insurance Corp., said the intern program was being used at those agencies to fill many entry-level openings.

The OPM report shows that agencies are moving to "more relaxed standards," said Colleen M. Kelley, the union president. "This presents a danger that hiring decisions become based on factors other than a candidate's qualifications and that weakens the merit-based federal civil service."