Although many of their union leaders back the Obama administration’s health care reform drive, some long-time members are not so sure. They are having flashbacks to the 1990s when when the Federal Employee Health Benefits Program was held up as a model for health care reform, as it is this time around.

At one point during the 1990s reform planning (which was largely done under wraps) strategists considered the idea of putting uninsured Americans into the FEHBP. Membership in the FEHBP currently is limited to active and retired feds, their spouses or survivors, dependent children and in some cases former spouses. The government pays around 70 percent of the total premium of the many plans offered under the FEHBP.

Unions, who were supporting the Clinton administration reform plan, balked at the everybody-in-the-FEHBP pool plan. They eventually got promises that none of the health plans offered by unions (to members and nonmembers) would be forced to take people from outside the government.

Many people involved with the FEHBP feared that taking in outsiders—some of whom couldn’t otherwise qualify for coverage—would result in much higher premiums and/or reduced benefits.

That 20th Century reform effort died in part because so much of it was done behind closed doors. This time around the administration is stressing “transparency” and is letting Congress, to a large extent, craft the reform package.

A member of that 1990s health care task force recalled “we considered every option you can think of, including dividing the country into 5 parts and putting uninsurable people in those areas into the FEHBP. Most of the reporting about what we were doing was garbled or wrong. The idea was that everybody was for ‘reform’ so long as it didn’t impact their particular health plan.”

Last week a reader, Kyle E., from Tulsa, asked what-if any-changes the health care reforms being drafted by Congress would have on the 9 million people in the FEHBP. A spokesperson from the National Active and Retired Federal Employees had this response:

“…It’s hard to know how, if at all, benefit plans will change as a result of comprehensive health care legislation. While the “National Health Insurance Exchange” created by the bill to provide public or private coverage to the uninsured is modeled after the FEHBP, it would not use the federal employee program as a vehicle to deliver health care nor would FEHBP be opened to non-federal civilian enrollee. At this point, there is no indication that Congress intends to use FEHBP as the public program. However, the legislation is subject to change and FEHBP, as a result, could be directly affected.

Members of Congress and their staff participate in the FEHBP in the same manner as any other federal employee. There is no effort to reduce the FEHBP to pay for the public plan nor will the government be able to force employees or annuitants into the public plan. As part of the employer mandate employers of a certain size, a threshold far surpassed by the government, must offer employer-provided health benefits or pay a substantial fine. This is a common mechanism used to guarantee that the public system is not overwhelmed and to preserve the employer-based health care system. While the government pays the majority of FEHBP premiums as well as any public plan, it is important to remember that they come from very two distinctive pools. The FEHBP is an employer-provided health benefit administered by the Office of Personnel Management and paid for by the government because the government is the employer. A public plan will be administered by the Department of Health and Human Services and is a social service.”

Stay tuned.

Nearly Useless Factoid
by Emily Jarvis

The average lead pencil will draw a line 35 miles long or write approximately 50,000 English words.

To reach me: mcausey@federalnewsradio.com

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