The Clinton administration early next year will ask Congress for more control over the Federal Employee Health Benefits Program. FEHBP pays a chunk of the medical bills for 9 million current and former feds and their family members, including in some cases grandchildren and ex-spouses.
Nearly half the people in the Washington area are under the giant federal health program. It is a trendsetter in terms of premiums and benefits. It served as a model for the administration's national health care proposal and was recently opened, on a test basis, to some military personnel.
The administration hopes to get more control by convincing "stakeholders" (unions, retiree groups, health plan officials and politicians) that it would result in better benefits--such as dental coverage--while slowing the growth of premiums. That logic may be met with skepticism on Capitol Hill. Many Republicans attribute some of the premium increases to coverage ordered by the White House to win political points.
Dental benefits in the federal health program are poor to moderate. The best plans--which pay about half of dental bills--are all health maintenance organizations. If the Office of Personnel Management can convince employee and retiree groups that it could give members better dental benefits--if given new bargaining clout--that would put pressure on Congress to give it more clout.
Premiums this year went up an average of 9.5 percent and will rise 9.3 percent in January. Although that isn't excessive, according to insurance experts, OPM believes it could broker better coverage and premiums if given the power. That would include dealing directly with providers for certain benefits and enforceable higher standards for plans to join and remain in the federal program.
The number of FEHBP plans has dropped for several years. Next year about 300 plans, mostly HMOs, will participate. Workers and retirees have the choice of six nationwide fee-for-service plans, plus about a dozen local HMOs.
Forty-three plans--mostly small HMOs--are dropping out of the program this year. An additional 66 left it last year. Many had fewer than 1,000 members, but last year's casualties included the once-top-rated BACE (Beneficial Association of Capitol Employees) plan. BACE covered senators and representatives, staff members and, at one point, Vice President Gore and his family.
OPM brass took issue with yesterday's column, which said the government was putting on a happy face by pointing out that the 4.8 percent January pay raise for white collar workers (and expected 2.3 percent raise for federal retirees) will more than offset premium increases for the average worker. "There are no happy faces over here, I can assure you," an OPM official said. He said OPM Director Janice R. Lachance--who spent years as a federal union official--is "very upset" about premium increases over the last several years and plans to take steps to improve benefits and hold the line on premiums.
Any changes in direction or management of the federal health program are likely to be controversial, especially since 2000 is a presidential as well as a congressional election year. The price tag and implementation of politically popular benefits changes can be delayed for a year or two, while politicians who won them get immediate credit.
Meanwhile, OPM officials are due on Capitol Hill next week for a meeting--not a formal hearing--with the House civil service subcommittee on the subject of adding long-term care insurance--with premiums paid by policyholders--to the federal health insurance program. Rep. Joe Scarborough (R-Fla.) chairs the subcommittee, which is the launching pad for most legislation affecting government workers.
Rep. Elijah E. Cummings (D-Md.), a ranking member of the parent House Government Reform and Oversight Committee, has demanded congressional hearings now on the 2000 health premium increase.
But a subcommittee source said a formal hearing would produce little in the way of results "because carriers [the insurance plans] would simply say they were following" OPM instructions on benefit levels to be offered while "OPM says it has a solution 'in the works.' "
Postal Buyout Rumors
Some hope-springs-eternal U.S. Postal Service workers are spreading the false rumor that buyouts, and early-retirement offers, are coming. Many federal agencies are offering buyouts (worth up to $25,000) and/or early retirement. But the Postal Service isn't, and won't be, one. That was confirmed recently in a Federal Times interview with Yvonne Maguire, vice president for human resources for the Postal Service. Her message: No buyouts, no early-outs are contemplated. For good reason.
The Postal Service infuriated Congress after a 1992 buyout program. Many of the nearly 50,000 workers who were paid to leave had to be, and were, replaced by new bodies, at moderate to high salaries. The message from Congress: Don't do that again.
Mike Causey's e-mail address is firstname.lastname@example.org