The federal Court of Appeals yesterday blocked the open season on the government's health insurance program from beginning on Monday after deciding that too much confusion surrounds the program for federal workers to make informed comparisons of premium costs and benefits.
The open season is traditionally a chance for 10 million federal workers, retirees and dependents to shop around for the health insurance coverage best suited to their needs. A federal court order issued last month had cleared the way for it to begin Monday.
But the appellate court -- acting on an appeal from the Office of Personnel Management -- said it would halt implementation of that order pending a hearing on whether an open season ought to be held at this time.
However, the court did order that a limited open season be held for new government employes who are not yet enrolled in an insurance plan. OPM said yesterday that the relatively few new employes affected have always had the option of signing up for health coverage next year.
The court said it also would halt, pending a hearing, another federal decision ordering OPM to roll back some of its cuts in health benefits.
Employe groups said late yesterday they expected the open season issue to be resolved and a shopping around period to be held within 30 days. But OPM said it didn't expect a decision for at least 30 days and hoped the open season could be postponed indefinitely until Congress can enact legislation to change the way the current health insurance program operates.
The appeals court ruling is the latest development in a legal battle that has raged since OPM director Donald J. Devine told employe groups last summer that he planned to cut health insurance benefits and raise premiums in order to trim the government's share of health insurance costs under the Federal Employe Health Benefit Program.
Several unions successfully challenged some of those cutbacks in federal court, and OPM had then sought to postpone holding an open season.
The agency yesterday began recalling a packet of health insurance information it had begun distributing Thursday, information that indicated health insurance costs for federal workers would jump an average of 40 percent next year.
"The program needs a period of stability so it can settle down and people can make orderly decisions," Devine said in a telephone interview. "We could have had the kind of panic similar to a run on the bank."
OPM said the court ruling furthered its efforts to save taxpayers "hundreds of millions of dollars" and keep insurance premiums from climbing higher. It said it now planned to proceed with the additional benefit reductions that had been ruled illegal by a federal judge and was confident of being "vindicated" by the appellate court.
The reaction of union groups was mixed. The National Treasury Employes Union said it was "pretty disappointed" in the appeals court ruling and blamed Devine for "creating chaos in the health program and then using it as an excuse to go forward" with benefit reductions.
But American Federation of Government Employes chief Kenneth Blaylock said he applauded what he said was the court's decision to hold off the open season until the confusion created by "OPM's tardiness in preparing appropriate" health insurance information is cleared up.
Both unions said they were confident both the open season and the rollback of benefit cuts would ultimately be sustained by the appeals court.
Devine, who has likened the health insurance cost increases to the government's willingness to play "tooth fairy," said he hoped to make specific legislative recommendations to Congress within the next two weeks that would revamp the program and adjust funding formulas.
"The chaos has been in this thing a long time before I came along," he said.