Two leading health-insurance providers squared off during congressional testimony Thursday, debating whether the government should allow more plans to participate in the $47 billion health-benefits program for federal employees.

At a hearing before the House subcommittee that oversees the federal workforce, United Healthcare urged lawmakers to allow regional and state preferred-provider organizations (PPOs) to join the health-benefit program, which covers about 8 million workers.

That request is in line with President Obama’s 2014 budget proposal, which calls on Congress to allow new types of insurance plans into the fold.

United Healthcare asserted that adding more plans to the mix would increase competition and help keep premium costs in check. The 1959 law that established the benefit program restricts which types of plans can participate and does not allow regional or state PPOs.

“In this age of fiscal challenges, the federal government needs the same tools to manage costs that every other large employer has,” said United Healthcare executive Thomas Choate.

Blue Cross Blue Shield, which covers more than 60 percent of the federal workforce as the sole provider of the program’s government-wide “service benefit plan,” said that carriers should be allowed to participate in the program only if they offer uniform rates nationwide.

The health-insurance giant is concerned that smaller providers will cherry-pick low-cost regions, ultimately driving up premiums for the nationwide plans. The group estimates that premiums would rise for 54 percent of federal employees if regional PPOs are allowed into the mix.

“Within a few years, the nationwide plans will become non-competitive and will likely stop offering nationwide coverage altogether,” said Blue Cross executive William A. Breskin. “This would leave certain areas of the country underserved or potentially not served at all and create gross disparities in health insurance costs for enrollees in different areas.”

The White House budget said that current law is “reflective of the 1950s insurance market” and that it “leaves little flexibility for the program to evolve with the changing market.”

Blue Cross has said competition is already adequate, with 230 plans participating in the program. But United Healthcare said on Thursday that the second-largest plan holds only 7 percent of the market, compared with Blue Cross’s 60 percent.

“That is clearly not a market in which real competition exists,” Choate said.

Rep. Darrell Issa (R-Calif.) and Del. Eleanor Holmes Norton (D-D.C.) both expressed concern about cherry-picking by regional PPOs if those plans are allowed to participate in the benefit program.

“While I share the administration’s view that the 50-plus-year-old [program] can be modernized and improved, I believe we should approach this cautiously and deliberately to ensure that any changes would improve the health of our federal employees and retirees and keep premiums and costs low and affordable,” Norton said.

Jacqueline Simon, who testified Thursday on behalf of the American Federation of Government Employees, said federal workers generally approve of the Blue Cross benefits package, even if they dislike the rising premiums.

“There is no appetite yet for additional breakaway plans that will further segment the market,” Simon said.

“If you want to bring down costs, you require one standard benefits package and then let plans compete for who can provide that package at the best cost and with the best quality,” Simon added during an interview.

The AFGE also raised concerns on Thursday about a 40 percent excise tax that will apply to high-cost, or “Cadillac,” health plans starting in 2018.

Simon said in her testimony that the tax, which came about as a provision of the Affordable Care Act, will make health benefits less affordable for federal employees whose plans meet the threshold.

Simon argued that qualifying plans do not provide platinum benefits to workers. She said those packages involve high premiums simply because of greed on the part of insurance companies and a lack of pushback from the Office of Personnel Management, which negotiates the rates.

The president’s budget calls for two additional changes to the health-benefit program.

One proposal would create a new rate category known as “Self Plus One” for married couples without dependents. Currently, only two tiers exist: Self and Self Plus Family.

Another proposal would give OPM the authority to contract separately from insurance providers for pharmacy benefits.