FEDERAL employees in this and other areas are currently participating in an enormously interesting experiment in improving competition in the medical sector. For almost a month, they have been shopping among the 131 different health insurance plans that the government offers, trying to figure out which best suits their needs and pocketbooks.
Federal employees have long had the choice of different health plans, but, until recently, the vital ingredients of competition were missing. Plans didn't vary much in price and coverage, and there wasn't much information about such differences as existed. Since medical insurance costs were relatively low, most workers chose plans that were familiar and provided the fullest coverage.
Now all that has changed. In 1983, the average cost of federal health insurance premiums will jump 24 percent on top of hefty increases in previous years. These increases, however, will be far from uniform. Premiums for some plans will double, while others will increase by only a few percent. The most expensive plans will cost as much as five times more than the cheapest plans.
Government workers also have much better information about their choices. The best help hasn't come from the government--many workers still complain that agency information was late and inadequate. The CHECKBOOK guide published by the local non-profit Center for the Study of Services, however, gives detailed information and ranks plans in terms of the likely total medical costs -- including both premiums and uncovered costs -- that subscribers will face. Hundreds of federal workers have also attended the several symposiums on plan choices sponsored by area congressmen.
Armed with this information, the consumer must still decide how much risk he wants to take and how he wants to buy his health care. More costly plans typically cover more types of services and pay a larger proportion of medical costs. But some plans are also more efficient in controlling health costs. These are typically the health maintenance organizations that run their own facilities, although health care reformers hope that competition will encourage other insurers to begin restricting coverage to health care providers who agree to cost restrictions.
Then there's the question of the kind of people to pool your risk with. People who expect high medical costs -- for example, those with existing health problems or with large families--are more likely to choose plans that provide more complete coverage or offer services, such as dental or psychiatric care, that they know they will use. This drives up costs so that a subscriber in a high-coverage plan may end up paying more for medical care than if he had decided to opt for a cheaper plan with more limited coverage.
Sorting out all these choices is hard work. For whatever comfort it's worth, however, federal workers should know that they are pioneering in efforts to bring medical costs under control. Their choices will be studied with interest by policy-makers and employers throughout the country.