The House approved compromise legislation yesterday that would free up refunds for millions of federal workers and retirees on their 1985 health insurance costs and lower premiums for many of them next year.
The bill, introduced by Rep. Mary Rose Oakar (D-Ohio), combines elements of differing legislation passed earlier by the House and Senate.
Both the Senate and House favor the refunds, which are being offered by seven major health insurance plans to 1985 policyholders, including about 250,000 people living in this area.
But before the refunds can be paid to retirees as well, Congress must change the federal health insurance law. Depending on the plan and option, the refunds range from $18 to $400.
An earlier refund bill cleared by the House included language that would change the formula the government uses to determine how much of each premium it pays. The Senate passed the refund bill, but struck the formula-changing provision.
The House yesterday approved several amendments sought by the Senate in an effort to make the entire package acceptable.
The House version would guarantee that the government pay at least 60 percent of all premiums. This would benefit many workers and retirees who have chosen low-cost plans but who sometimes pay a bigger share of the premiums than those who buy more expensive insurance.
Under the current system, the government share is based on 60 percent of the average premium charged by the six bills health plans. But the law bars the government from paying more than 75 percent of any premium.
The cap means that in many instances people who pick health plans with low premiums wind up paying a bigger share of the premiums than persons with more costly insurance.
The change proposed by the House guarantees that the government would pay 60 percent of each individual's actual premium, even if that payment exceeded 75 percent of the big six insurance plans averages.
Some administration officials contend that this would require the government to pay all of the premiums for some employes and retirees. Backers of the Oakar bill say this is an exaggeration designed to kill the proposal. They say that its primary effect would be to take care of employes and retirees who are now shortchanged by the complex averaging formula.